The Company owned a massive patent portfolio of more than 550 patents, over 450 of them granted and in key commercial territories including US, UK and Europe, which underpinned technology related to an innovative inhaler device. The technology had been subject to several high-profile license agreements: as alternatives to smoking and for the delivery of alternative treatments for cancer patients. The core device had been through a number of iterations and uses, including being approved as a medical device. An estimated $170m had been invested in the technology, but the Company had generated minimal revenue at the time of our appointment.
The Company’s IP portfolio had been assigned a value on the balance sheet, however this figure did not accurately reflect the market value of the portfolio, and the Company’s advisors insisted on an independent valuation. We were engaged to provide a valuation of the Company’s IP portfolio to support a planned corporate restructuring transaction.
Using our Metisology® approach we appraised the IP assets developed and assessed how these assets were likely to underpin future revenues, particularly revenue streams from the existing patent licenses. Due to the significant investment that had been made in developing the IP and the limited commercialization to date, we utilized a cost approach to value the IP, taking account of the time and cost to recreate the portfolio, the impact of technology advances, and the period of protection that a recreated patent portfolio would likely provide.
We performed multiple IP valuations in order to provide the Company and its advisors with valuation advice that supported a number of restructuring scenarios, including the likely recovery from both an accelerated M&A and a forced IP sale. Our report also included detailed narrative on the extent and quality of the IP assets and the strategy and key factors that influenced how they had been leveraged to date to secure licensing deals. The licenses were expected to generate material future revenues once full commercialization was finally achieved and was therefore highly relevant for a potential acquirer of the IP.
The Company’s advisers relied on our IP Valuations to appraise and confidently accept an offer they received for the Company’s IP portfolio, and the IP was successfully sold, avoiding a potentially substantial loss against this significant technology investment.
IP Assets Valued: Brand, Trade Marks, Patents, Website and Domains, IP Licenses, Key Organizational Knowledge
