(7) Licensing agreements
Accounting and measurement policies
Out-licensing agreements
The Group primarily enters into material out-licensing agreements for intellectual property in the Healthcare business sector. The granting of a license typically constitutes a distinct performance obligation that must usually be recognized at a point in time. Due to the uncertainty of development results and regulatory events, contingent consideration is typically recognized when the event in question has occurred. Sales-based and usage-based royalties are recognized when the contract partner makes the corresponding sales or uses the intellectual property. As out-licensing transactions in the Healthcare business sector do not form part of ordinary activities and the licensees do not constitute customers within the meaning of IFRS 15, the corresponding income from upfront payments, milestone payments and royalties is reported in other operating income (see Note (13) Other operating income).
In-licensing agreements
The accounting and measurement policies for the in-licensing of intellectual property are presented in Note (19) Other intangible assets.
Significant discretionary decisions and sources of estimation uncertainty
Licensing agreements
As part of the accounting treatment of licensing agreements, significant discretionary decisions have to be made in the following areas:
Identification of an appropriate income recognition method and
Determination of the appropriate timing of income recognition.
Estimates are to be made when it comes to determining the transaction price and progress on the performance obligation in particular.
The following describes the main licensing agreements.
Acquired licensing agreement from the acquisition of SpringWorks Therapeutics Inc., United States
With the acquisition of SpringWorks Therapeutics Inc., United States (SpringWorks), the Group became part of a collaboration previously established between SpringWorks and Pfizer Inc., United States (Pfizer) (see Note (6) Acquisitions and divestments).
Pfizer funded a Phase Ib/II study in which SpringWorks’ gamma secretase inhibitor nirogacestat was tested in combination with Pfizer’s anti-BCMA×CD3 bispecific antibody PF 06863135 in patients with relapsed or refractory multiple myeloma. As for nirogacestat, the development and marketing rights for mirdametinib, an oral MEK 1/2 inhibitor, were also licensed from Pfizer in 2017 and further developed by SpringWorks.
Nirogacestat (trade name Ogsiveo®) received approval from the U.S. Food and Drug Administration (FDA) in the United States on November 27, 2023, for the treatment of adult patients with progressive desmoid tumors requiring systemic therapy. Mirdametinib (trade name Gomekli®) was approved by the FDA on February 11, 2025, for the treatment of adults and children from two years of age with symptomatic, not fully resectable plexiform neurofibromas (NF1 PN).
Depending on the achievement of certain sales milestones, Pfizer is entitled to future milestone payments as well as license payments on future sales amounting to a mid-triple-digit million euro sum.
Termination of the in-licensing agreement with Debiopharm International SA, Switzerland, on drug candidates for the treatment of head and neck cancer
On June 24, 2024, the Group announced the discontinuation of the clinical trials of the drug candidate xevinapant, which had been in-licensed from Debiopharm International SA, Switzerland, in fiscal 2021.
The termination of the program led to an impairment loss of € 140 million on an intangible asset, which was reported in other operating expenses, as well as the initial recognition of a provision in a high double-digit million euro amount for follow-on obligations, the addition of which was reported in research and development costs. In fiscal 2025, the provision for follow-up costs was reduced to a single-digit million euro amount (see Note (27) Other Provisions).
Termination of the in-licensing agreement with Jiangsu Hengrui Pharmaceuticals Co. Ltd., China, on drug candidates for the treatment of metastatic colorectal cancer
On October 30, 2023, the Group announced the conclusion of an in-licensing agreement with Jiangsu Hengrui Pharmaceuticals Co. Ltd., China (Hengrui), including an exclusive worldwide license (excluding China) to develop, manufacture and commercialize the PARP1 inhibitor HRS-1167 and a corresponding option for SHR-A1904, an antibody-drug conjugate.
Based on the emerging efficacy and safety data in combination with other compounds and the rapidly evolving competitive landscape in the established PARP inhibitor space, the Group made the strategic decision not to pursue further development.
The termination of this trial in Phase Ib resulted in an impairment of an intangible asset amounting to € 174 million as well as the recognition of a provision for follow-up costs in the low double-digit million euro range.
In-licensing agreement with Abbisko Therapeutics Co. Ltd., China, on drug candidates for the treatment of tenosynovial giant cell tumor
On December 4, 2023, the Group announced the conclusion of an in-licensing agreement with Abbisko Therapeutics Co. Ltd., China (Abbisko), including an exclusive license to commercialize pimicotinib in China, Hong Kong, Macau, and Taiwan as well as an exclusive commercialization option for the rest of the world. Pimicotinib is an investigational, orally administered, highly selective, and potent small-molecule antagonist of colony-stimulating factor-1 receptors.
On November 12, 2024, the Group announced that the pivotal Phase III MANEUVER study had met its primary endpoint. The study demonstrated a significant improvement in the objective response rate in patients with tenosynovial giant cell tumor (TGCT). It also provided statistically significant and clinically meaningful improvements in secondary endpoints, including stiffness and pain.
The Group agreed to make an upfront cash payment of US$ 70 million (€ 64 million) for acquired rights and future development activities to be performed by the seller. Abbisko will receive additional payments for the achievement of certain regulatory and commercial milestones as well as tiered royalties on net sales by the Group. The acquisition of the rights resulted in the recognition of an intangible asset not yet available for use in the amount of € 45 million.
On March 28, 2025, the Group announced that it had exercised the agreed option to commercialize pimicotinib in the rest of the world. The Group has paid US$ 85 million (€ 74 million) to exercise the option to acquire the global commercialization rights for pimicotinib. The acquisition of the rights resulted in the recognition of an intangible asset not yet available for use in the amount of € 79 million.
On December 22, 2025, the Chinese regulatory authority granted the world’s first approval for pimicotinib for the treatment of TGCT. On January 12, 2026, the Group announced that the FDA had accepted its application for marketing authorization for pimicotinib for the treatment of TGCT, based on results from the MANEUVER study.