Success Fee
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- Success Fee
Success Fee
The Success Fee is a compensation formula applied at the back-end of all successfully completed agreements effectuated by our clients based on an introduction through Innovaro Pharmalicensing's Partnering Search & Profiling services.
The Success Fee will be calculated based on the formula below (in US$):
Partnering Search
- 8% of the first million dollars US involved in the transaction
- 6% of the second million
- 4% of the third million
- 2% of everything thereafter (above 3 million dollars US)
Profiling
- 4% of the first million dollars US involved in the transaction
- 3% of the second million
- 2% of the third million
- 1% of everything thereafter (above 3 million dollars US)
The Success Fee is applied by Innovaro Pharmalicensing based only on a successfully completed agreement between our client and a third party organisation introduced to the client by Innovaro Pharmalicensing. Payment shall be made to Innovaro Pharmalicensing in the same manner and time that the payments are exchanged between our client and the third party.
What would be the Success Fee for $10,000,000 transaction?
Partnering Search
The simple answer is $320,000.
And this is how we calculate the Success Fee:
| Transaction value | % | Success Fee |
|---|---|---|
| $1,000,000 | 8% | $80,000 |
| $1,000,000 | 6% | $60,000 |
| $1,000,000 | 4% | $40,000 |
| $7,000,000 | 2% | $140,000 |
| $10,000,000 | $320,000 |
A few other examples:
| Transaction value | Success Fee | Overall % |
|---|---|---|
| $10,000,000 | $320,000 | 3.2% |
| $15,000,000 | $420,000 | 2.8% |
| $20,000,000 | $520,000 | 2.6% |
| $25,000,000 | $620,000 | 2.48% |
Profiling
And for Profiling it is $160,000.
And this is how we calculate the Success Fee in this case:
| Transaction value | % | Success Fee |
|---|---|---|
| $1,000,000 | 4% | $40,000 |
| $1,000,000 | 3% | $30,000 |
| $1,000,000 | 2% | $20,000 |
| $7,000,000 | 1% | $70,000 |
| $10,000,000 | $160,000 |
A few other examples:
| Transaction value | Success Fee | Overall % |
|---|---|---|
| $10,000,000 | $160,000 | 1.6% |
| $15,000,000 | $210,000 | 1.4% |
| $20,000,000 | $260,000 | 1.3% |
| $25,000,000 | $310,000 | 1.24% |
Frequently asked questions about Success Fee:
Do we have to pay a Success Fee on all deals that we do in the future?
No, the Success Fee is only applicable to those agreements which have been actively effectuated by an introduction to the third-party partner organisation through Innovaro Pharmalicensing services.
At what point is the Success Fee payable? Do we have to pay the Success Fee at the time we execute an agreement with the third party?
No, you would not need to pay the Success Fee at the time you execute the agreement with the third-party. The Success Fee will be payable at the point when payments are exchanged between you and the third-party organisation.
If we execute an agreement with a third party but the agreement collapses before any payments are exchanged do we still have to pay the Success Fee?
No, under these circumstances there would be no Success Fee applicable because no payments would have been exchanged between you and the third party. At this stage we would be happy to work with you to identify alternative partners with whom you can work.
To what elements of the agreement would the Success Fee be applicable?
The Success Fee would be applicable to all elements contained in the agreement where payments would be exchanged.
These would include, but not be limited to, any up-front payments, milestones and ongoing royalty payments for transactions through the partnering.
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| Transaction value |
 |
| The Success Fee |
$320,000 (3.2%) |
Number in the brackets shows percentage of the Success Fee to overall transaction value.
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