Life Sciences: Milestone Trends by Product Stage

This infographic reveals milestone trends by product stage on deals where SRS Acquiom has served as post-closing shareholder representative for sellers on 227 M&A transactions since 2008 involving private-target Life Sciences companies.

  • Total Life Sciences Deals 227
  • Up-Front Payments $39.6B
  • Potential Earnout $37.5B
  • Earnout Deals 163

Negotiated Milestone Dollars by Development Phase: Bio/Pharma

Each line on the graph shows the distribution of different dollar amounts parties have agreed to pay upon achievement of milestones at the end of a given phase of development.

Mean Milestone $ Amounts:

  • Preclinical $26MM
  • Phase 1 $42MM
  • Phase 2 $51MM
  • Phase 3 $52MM

Median Milestone $ Amounts:

  • Preclinical $20MM
  • Phase 1 $35MM
  • Phase 2 $39MM
  • Phase 3 $30MM

Most Frequent Negotiated Amounts (% of Events):

  • Preclinical: $20MM (21%); $30MM (13%); $50MM (13%)
  • Phase 1: $50MM (20%); $20MM (9%); $5MM (9%)
  • Phase 2: $50MM (14%); $20MM (11%); $35MM (11%)
  • Phase 3: $10MM (12%); $50MM (10%); $100MM (9%)

Milestone Achievement by Product Stage


Bio/Pharma milestones are being hit at the end of each phase of development, with particularly high rates (but lower $) in early phases.

Total Developmental Milestones Paid - $2.7B out of $7.5B (36%)

Achievements by Events: 

  • Preclinical: 15 Paid Events / 25 Total Events / 60% Events Paid/Total
  • Phase 1: 16 Paid Events / 36 Total Events / 44% Events Paid/Total
  • Phase 2: 15 Paid Events / 50 Total Events / 30% Events Paid/Total
  • Phase 3: 17 Paid Events / 59 Total Events / 29% Events Paid/Total
  • Total Development:  63 Paid Events / 170 Total Events / 37% Events Paid/Total

Devices and Dx/Research: 

Devices and Dx/Research milestone events are being achieved in both development and commercial stages, although $ payment rates trend 6–10% lower.

Total Developmental Milestones Paid - $1.15B out of $4.1B (28%)

Achievements by Events: 

  • Development: 50 Paid Events / 113 Total Events / 44% Events Paid
  • Commercial: 34 Paid Events / 112 Total Events / 30% Events Paid
  • Total: 84 Paid Events/ 225 Total Events / 37% Events Paid

*Total earnout potential $ for commercial milestones includes not only defined $ payments, but also defined $ caps for variable or formula-driven payments.

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Don Morrissey

Head of Life Sciences 303.250.8936

Don advises life science clients on M&A deal negotiations and post-closing milestones and earnouts. He is principal author of our life science studies and a frequent speaker at industry events.

Before joining SRS Acquiom, Don spent more than a decade helping to grow two venture-backed life science start-up companies through IPOs. He has been responsible for many strategic transactions involving licensing, partnering and M&A, as well as financings with leading venture capital and private equity firms. He was formerly SVP, Corporate Development and General Counsel for Replidyne, an antibiotic drug development company, and VP, Legal Affairs and Business Development for Caliper Life Sciences, a microfluidics company. He began his career as a business attorney with Cooley LLP.

Don holds a law degree from USC and a BA in Molecular, Cellular and Developmental Biology from the University of Colorado.

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