As the patent cliff looms the pharmaceutical and biotechnology industry is undergoing considerable change requiring greater innovation and a strong need for successful partnering. Royalties can represent the most valuable component of a deal but are often couched in remote and desensitized terms whereas the upfront and milestone values often grab the headlines in the deal announcement. Understanding the true value of your asset and how royalties are inextricably linked with overall deal value can help you negotiate on the things that really deliver value. You stand to lose more of your hard earned value through royalty percentages and tier adjustments than any other component of the deal.