Basics of a Royalty Monetization Transaction

A Step-by-Step Guide to Biotech Funding Through Royalties

A step-by-step guide to Biotech Funding through royalties
1

Step 1: License Agreement

The Biotech company develops a drug or technology and licenses it to a Pharma Partner (a bigger pharmaceutical company).

In exchange, the Pharma Partner agrees to pay royalties and milestone payments based on the drug's success or sales.
2

Step 2: Royalty Monetization

Instead of waiting for future, uncertain royalties, the Biotech company sells a portion of its future payment rights to a royalty financer.

The royalty financer provides upfront payment (Capital), enabling immediate funding for operations or growth.
3

Step 3: Cash Flow to Royalty Financer

As the drug generates sales, the Pharma Partner pays royalties directly to the royalty financer until the agreed portion is fully paid.

This provides non-dilutive funding (no new equity issued) while leveraging future royalties.

Variations

The above schedule outlines the standard royalty monetization concept. However, as with licensing deals, many variations are possible:

Multiple Assets and Licenses

The concept can be applied to baskets of assets and licenses; this makes RM more attractive to RM financers.

No Milestones, Only Royalties

Deals can be structured in such a way that certain milestones are not or only partly included in a RM deal if that fits other stakeholders' interest better.

No License But Revenues

If you do not have license deals but a predictable or growing revenue stream from one or more of your products, these can be monetized as well.

Lastest posts

View all posts->
June
30
-
,
2025
- release at
CET
US

BridgeBio Raises $300 Million Through Partial Capped Monetization of BEYONTTRA® European Royalty

BridgeBio Raises $300 Million Through Partial Capped Monetization of BEYONTTRA® European Royalty

PALO ALTO, Calif., June 30, 2025 (GLOBE NEWSWIRE) — BridgeBio Pharma, Inc. (Nasdaq: BBIO) (“BridgeBio” or the “Company”), a new type of biopharmaceutical company focused on genetic diseases, today announced it has sold a portion of royalties due to the Company from sales of BEYONTTRA in Europe to HealthCare Royalty (“HCRx”) and funds managed by Blue Owl Capital (“Blue Owl”) for $300 million. This royalty financing agreement monetizes select anticipated royalties and provides immediate less-dilutive capital to the Company.
June
10
-
,
2025
- release at
CET
US

MacroGenics and Sagard Healthcare Partners Enter into ZYNYZ® Royalty Purchase Agreement

MacroGenics and Sagard Healthcare Partners Enter into ZYNYZ® Royalty Purchase Agreement

Under the terms of the royalty purchase agreement, MacroGenics received a $70 million upfront payment for the sale of its royalty rights on global net sales of ZYNYZ. Following Sagard’s receipt of aggregate royalty payments totaling $140 million (or 2.0x), MacroGenics will resume collecting all future royalties on global net sales.
June
02
-
,
2025
- release at
CET
US

Theravance hands off the last of its Trelegy royalties to GSK for $225M

Theravance hands off the last of its Trelegy royalties to GSK for $225M

After years of picking up royalties on GSK’s asthma and COPD inhaler Trelegy, Theravance Biopharma is opting to sell its remaining financial interest to GSK in exchange for a cash reward of $225 million.
View all posts->

Request a free calculation of your royalties

Fill in a form with key details and we’ll get back to you with calculation

Request calculation