The withholding tax gross-up: who bears the tax on a cross-border royalty
Most licences leave the tax with the licensor, and a royalty buyer steps into the licensor's place. The yield on the stream then depends on where the buyer is resident.
More issues
Set-off: when the licensee pays the royalty net of its own claims
On 27 February 2025 the Fifth Circuit let Ovintiv keep more than $608,000 of royalties owed to two family companies in Karnes County, Texas. Ovintiv had misallocated gas flow between September 2016 and January 2018, which meant that it overpaid some royalty owners and underpaid others.
Among those overpaid
Commercially reasonable efforts: what a royalty holder can enforce when the licensee stops trying
In January Johnson & Johnson paid a judgment of $0.8B, including interest, to the former stockholders of Auris Health. Their representative had sued in October 2020.
The claim rested on a promise in the 2019 merger agreement to use commercially reasonable efforts to win clearance for a surgical robot,
The Weekly Term Sheet (2026-W45)
Royalty and profit-share rates published between 1 and 8 November: 12 hard numbers and 15 bands across the window, with word bands converted to ranges. Of the three royalties created, Theriva's from Biossil carries a low single-digit band, capped at USD 250m, and the Boston Scientific
Tariffs in the net sales definition: whether an import duty comes off the royalty base
Since 29 September 2026 most imported patented drugs carry a United States duty. Whether the licensor bears part of it depends on a few words in the net sales definition, and in most licences those words point the other way.
Fund of the Week: California Institute for Regenerative Medicine
California's stem cell agency has committed most of $8.5B of voter-approved bonds as grants. A company that sells a product built on one of them owes the state a royalty of 0.1 per cent of sales for each $1M awarded, for ten years or until it has paid nine times the award.
Company of the Week: Rhythm Pharmaceuticals
On 2 and 3 November 2026 Rhythm Pharmaceuticals agreed to pay LG Chem $350M to cut a royalty to 1 percent, signed a $750M term loan led by its revenue interest investor, and loosened the terms of that revenue interest. All three contracts are claims on the same IMCIVREE sales.
The price of leaving: what a lender collects when a royalty sale repays its loan
On 14 August Coherus Oncology drew $55M from a new loan led by Innovatus and repaid a $38.7M term loan from lenders advised by Barings. The Barings loan had been signed in May 2024, on the day Coherus sold a share of its American sales of UDENYCA and LOQTORZI
The release fee: what a royalty holder is paid when the product is sold
On 1 October 2025 BioCryst Pharmaceuticals closed the sale of its European ORLADEYO business to Neopharmed Gentili. BioCryst received $250.0M in cash for the shares of BioCryst Ireland, and may receive up to $14.0M more if revenue milestones are met before the end of 2032.
On the same
What a royalty audit recovers
On 17 March 2026 Judge Philip Halpern, sitting in White Plains, refused to dismiss a suit Regeneron had brought against Sanofi over Dupixent. The opinion turned on an audit clause. The parties' collaboration agreement lets each side's accountants check "the accuracy of all financial, accounting and