While the average earnout potential per biopharma deal has declined over the last five years, the mean upfront value has been on the rise since 2017, according to data from SRS Acquiom.
The mean earnout potential for industry deals inked from mid-2023 to mid-2025 was $437 million, according to data on 64 deals analyzed by SRS Acquiom, a U.S. loan agency and post-closing shareholder representative. The deals relate to companies represented by the agency.
The most recent potential earnout data are down from the $494 million recorded for the mid-2021 to mid-2023 period and substantially lower still from the COVID-19 era’s $683 million.
Meanwhile, upfront payments have trended in the opposite direction, rising to $386 million for the most recent period from $303 million for the two years prior and $272 million for the mid-2019 to mid-2021 period.
The number of milestone events has also declined since the pandemic-era industry spike, falling even lower than levels seen from 2015 to 2019.
When looking at actual earnout achievement rates, 22% of biopharmas hit milestone events, according to the most recent mid-2025 data. That rate is unchanged from the 22% in 2023, but below the 34% in 2021, 33% in 2019 and 31% in 2017.
For 128 biopharma deals that had at least one milestone due by mid-2025, 45% of the deals hadn’t garnered any earnout money. Meanwhile, only 5% of the deals had collected 75% to 100% of their potential earnout worth.
In short, a very small minority of the biopharmas represented by SRS Acquiom have already collected the majority of their earnout potential, while nearly half of the companies have yet to reel in any of the biobucks on the table.
When slicing the data another way, the 128 deals with at least one milestone due by mid-2025 encompassed 609 events. Overall, biopharmas missed those milestones 73% of the time (443 events), while 5% (30 events) were pending. That means 22% (136 events) of biopharmas achieved milestone earnouts that were due for an aggregate amount totaling $6.5 billion.
Meanwhile, the 73% of missed milestone earnings left a collective $27.4 billion in uncollected biobucks.
For the 136 times that biopharma deals did secure a milestone payment this year, 56 of the paid events happened within the first two years of the deal closing. On the other end of the spectrum were the eight milestone collections that occurred more than seven years after closing.