If you had the opportunity to exchange the potential of a lucrative long-term royalty stream for a huge windfall right now, would you take it? An increasing number of TTOs and the organizations that support them are entertaining just such a proposition, and quite a few of them are opting for the sure money. Experts say royalty monetization agreements are becoming increasingly sophisticated to suit all the parties involved. And while royalty buyers clearly favor innovations with established revenue streams, they are beginning to take an interest in earlier stage innovations as well, particularly in the medical device and pharmaceutical arenas. Both the frequency and size of these transactions are accelerating. “From 2000 to 2003 there were a total of about $500 million in royalty monetizations. In the last four years, from 2004 to 2007, there have been $5 billion in royalty monetizations — a 10-fold increase,” says Louis Berneman, former head of the University of Pennsylvania’s TTO who is now a consultant to New York City-based royalty buyer Paul Capital Healthcare. “I believe royalty monetization is going to increasingly become a post-license value-creating mechanism because institutions frankly can do far better by monetizing a portion of a future royalty stream, and then reinvesting those dollars to recruit new faculty for start-up programs, build out new labs, or launch translational research,” he says. A detailed article examining trends in monetization deals and deal structures appears in the November issue of Technology Transfer Tactics. For subscription information, CLICK HERE.

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