HEALTH & LIFE SCIENCES NEWS
HEALTH & LIFE SCIENCES NEWS
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
HEALTH & LIFE SCIENCES NEWS
Exploring Critical Business and Legal Issues across the Healthcare and Life Sciences Industries
Health M&A
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Tips for Conducting Effective Due Diligence in an Auction Process

In today’s highly competitive healthcare environment, investors may find themselves in an auction process where they must conduct due diligence pre-exclusivity. With limited time and mounting pressure, it can be difficult to know what issues to prioritize. Here are some practical tips for focusing your due diligence efforts strategically in a pre-exclusivity setting: Quality of Earnings: Against the backdrop of high valuations, quality of earnings should be a key diligence focus, particularly in the context of high-complexity transactions  such as corporate carve-outs, partnerships with corporates and public-private pairings. For example, it is critical to examine the pro forma EBITDA to see if it excludes costs or includes questionable adjustments or add-backs. Timeline: How competitive is the auction process and when are bids due? Does the buyer plan to conduct a full due diligence review pre-exclusivity, or instead look for big ticket liabilities that have...

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Five Questions with a Health Lawyer: Kate McDonald

Kate McDonald Partner Office: Washington, DC Years at Firm: 6 What is your favorite part about practicing health care law at McDermott?  The health care regulatory work we do is cutting edge. From the largest health care companies to the smallest start-ups, our clients tend to be highly sophisticated and they come to us with high stakes questions that have no easy answers. We help clients navigate a complex web of health care regulations to implement innovative business models or bend the cost curve. The work I do is intellectually challenging and I love partnering with my crazy smart colleagues to solve problems. This is what keeps me coming back to work day after day. What is the biggest opportunity and greatest challenge facing clients in your area of focus today?  There is so much innovation occurring in the health care market today, and in particular in the managed care industry. Health insurers are partnering with an increasingly diverse set of business...

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Five Questions with a Health Lawyer: Matt Friendly

Matt Friendly Associate Office: Miami Years at Firm: 5 What is your favorite part about practicing health care law? I appreciate that health care is constantly evolving and changing. While the vastness of the field can be intimidating for some, it provides career-making opportunities to gain experience in a sub-specialty and build a reputation within that space. I am also grateful for the heavy volume of deal activity in health care – with no signs of slowing down – which presents constant opportunities to learn, grow and support clients who are shaping the health care landscape. What is the biggest opportunity and greatest challenge facing clients in your area of focus today?  The greatest opportunity for many of our clients is selling their business or portfolio company at a time when the market is ripe for health care acquisitions, with valuations trending upwards and buyers with tremendous amounts of capital to deploy. This dealmaking climate presents a...

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McDermott Named Health Practice Group of the Year by Law360

We greatly appreciate our readers continuing to turn to us for insight on the most critical legal, regulatory and transactional developments, and innovative collaborations transforming health care. Over the past year, McDermott’s Health practice made headlines for our work on several of the most high-profile collaborative transformations that took place in 2018: We were one of several law firms to advise CVS Health Corp. on its approximately $70 billion cash and stock purchase of health insurer Aetna Inc. McDermott also assisted Air Medical Group Holdings in its $2.44 billion acquisition of American Medical Response (AMR), a medical transportation company, from Envision Healthcare Corporation. It is because of our role in ground-breaking transactions like these that—for the fifth time in 10 years—McDermott was recognized by Law360 as the Health Practice Group of the Year. We’re passionate about the results our clients are achieving and our role in helping...

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A Year in Physician Practice Management: For Auld Lang Syne

With equal parts hope and optimism, we look ahead to an eventful New Year. This is particularly true for the physician practice management (PPM) industry: we reflect on the progress of the past while looking forward to the opportunities today’s growing and increasingly complex landscape provides. We believe the trends we’ve seen shape the industry will continue to be influential, including: The growing involvement of private equity investors Last year, we hosted the 2018 Health Care Services Private Equity Symposium, where we discussed how various business and legal opinions have an impact of private equity in the PPM industry. Watch this space, as they say, in 2019. PPMs continue to garner an emerging interest from investors, who are noting their benefits for assisting physicians in an increasingly complex reimbursement and regulatory environment. An increased focus on specialties entering the PPM fray In the late 90s, we saw a fast, chaotic rollout of PPMs...

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Dealmaking in Life Sciences – Valuations and Partnerships that Work

Technology companies are pouring unprecedented capital, time and energy into the health care and life sciences industry, and are reshaping the deal landscape in the process. The top 10 US tech companies have made $4.7 billion in acquisitions in the health care space since 2012, according to CB Insights. Key market factors driving health care joint ventures and mergers and acquisitions include the merger of molecular science and computer technology, a growing focus on patient-centric care, increased mobility of consumer health products and services, and deep capital markets. In this fast-paced, proactive deals environment, traditional health players have exciting—and disruptive—new opportunities to enter into unexpected partnerships and pursue transformative innovation. With Great Disruption Comes Great Opportunity A helpful analogy for understanding the role of tech companies in this rapidly evolving sector is Uber's disruption of the ride-hailing industry....

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Pursuing Progress: Collaborative Transformation in Action

It's the industry disruptors, the unusual partnerships, and the cross-border and cross-sector relationships that are driving Collaborative Transformation in the health care and life sciences organizations. But a Collaborative Transformation takes more than signing paperwork and shaking hands. A successful Collaborative Transformation takes cultural integration between non-traditional partners, incorporating new technologies into health care regulatory compliance structures, and so much more. At McDermott, we've recently had the opportunity to help our clients pursue their own Collaborative Transformations, and are proud to showcase their achievements. Innate Pharma Expands its Collaboration with AstraZeneca McDermott Will & Emery advised Innate Pharma, a French oncology-focused biotech company, in signing a multi-term agreement with AstraZeneca and MedImmune – AstraZeneca's global biologics research and development arm. This agreement broadens the...

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Connecting the Dots: Six Lessons from a Biotech M&A Case Study

For biotechs, success involves a several year hike through mazes of complex, cross-border, business, scientific, financial and regulatory issues. During this year's BIO2018 conference in Boston, McDermott gathered a panel of industry leaders and McDermott practitioners and led a case study assessment of cross-border biotech M&A, linking life sciences hubs in Europe, Asia and North America. I had the opportunity to moderate our panel as we walked through the structuring and closing of an M&A transaction that involved the auction of a fictional US biotech company that has oncology platform IP/technology. While the company described in the case study was fictional as such, the company and its circumstances were a composite of McDermott’s actual deals. Our panel’s examination of this case study yielded valuable insights into the context, cross-border dynamics, practicalities, opportunities and challenges underlying the growing volume of international life...

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Collaborative Transformation: Shaping the Future of Health Care, Together

As the health care and life sciences fields experience ever-increasing levels of disruption, diverse entities across the industry are teaming up to embrace and foster innovation. These new pairings are shaping the future of health care, as organizations come together to tackle the industry’s most pressing issues with redoubled agility and pooled resources. In an environment of change and uncertainty, this trend of Collaborative Transformation is yielding improved financial outcomes, increased operational efficiencies, and a fresh infusion of diverse talent and perspectives—all of which result in enhanced quality of care. This is where the McDermott Health and Life Sciences team comes in. As a top-ranked US health law practice and a leader in life sciences with decades of experience advising the leading players in US and cross-border health and life sciences, we have the skill, market insight and ingenuity to partner with you wherever your innovation takes...

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Key Considerations for a Seamless Practice Acquisition

For physician practice management (PPM) organizations going through an acquisition processes – whether by a physician group or a private equity firm – one idea should remain top-of-mind: integration must start before the closing. The Harvard Business Review states that 70 to 90 percent of acquisitions fail because of integration issues, noting that “companies that focus on what they are going to get from an acquisition are less likely to succeed than those that focus on what they have to give it.” Working toward a smooth transition for employees from day one will not only help boost morale, but also contribute to the value-add of your PPM. With that in mind, below are four key considerations to help implement an efficient and effective integration strategy, ensuring a seamless transition before, during and after the deal is done: Put Your People First – As we explored during our annual PPM/ASC Symposium back in March, the first step and greatest challenge in...

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