In today’s competitive and fast-paced life sciences dealmaking environment, buyers and investors are often unable to spend as much time on due diligence as they might like. Market players are often highly focused on the science itself and, as a result, may pay less attention to issues such as supply chain, intellectual property components and
The life sciences marketplace has been ripe for collaboration for the past decade, but new players, new technologies and new regulations are changing the space. Traditional life sciences companies are working together in new and exciting ways, bringing a variety of deal structures and new complexities into the landscape. Our Collaborative Transformation podcast episode “Driving the Deal: Life Sciences Partnership Opportunities, Pitfalls and Impact” with Emmanuelle Trombe and Gary Howes explores these issues in depth. Below are key takeaways from the episode, which you can listen to in full here.
It’s not just new players changing the space—it’s new approaches by traditional players. “It’s not only about pharma and biotech,” Trombe said. “We are seeing collaboration with health care players such as payers, insurers and providers.” Technology companies are also entering the space, bringing financial and philanthropic investments to the table. “People are still trying to do the same things, but they’re getting there in slightly different ways,” Howes said. Collaborations are also shifting from exclusive collaborations to more open collaborations, where partners are more closely involved in the product lifecycle, co-developing products and sharing technology, data and profits.
Bridging the gap between different industry cultures is crucial to building a successful collaboration. Product lifecycles and regulatory regimes vary across industries, but the gap between technology and health care/life sciences is particularly broad. “Life sciences health care companies looking at a lifecycle for their product is something like 20-odd years. That’s not the model that pure tech companies are used to,” Howes said. “There has to be some sort of realignment, so that both parties on either side of the collaboration understand each other’s business enough to make them a success.”
Data drives efficiency and efficacy in treatments, but the regulatory environment continues to present challenges to using it. Data collection is restricted in most countries, particularly for pharmaceutical companies and insurers, which makes it challenging to structure deals around data. Data regulations such as GDPR “could be a hurdle for the development of digital therapeutics, because they limit the ability to use the data collected in a meaningful fashion,” Trombe said. Overcoming these hurdles will be crucial to unlocking the potential solutions in medical data.…
Years at Firm: 13
What is your favorite part about practicing health care law at McDermott?
The team, the team, the team! It’s a pleasure to work with colleagues who have deep substantive expertise, prioritize client service, and are good human beings. As a healthcare M&A attorney, I am responsible for leading large teams of attorneys, including a variety of subspecialists, to drive efficient and effective outcomes and achieve business goals. I love knowing that, in nearly every instance, when an issue arises we have the specific expertise to handle it and there is no need to reinvent the wheel.
What is the biggest opportunity facing clients in your area of focus today?
Our hospital and health system clients have a tremendous opportunity to improve the delivery of patient care, expand services provided to their communities and defend against the challenge of declining reimbursement through strategic partnerships. In addition to traditional hospital and health system M&A, our hospital and health system clients are increasingly pursuing Collaborative Transformations – that is, partnerships with non-traditional health care players. A successful Collaborative Transformation takes cultural integration between non-traditional partners, incorporating new technologies into health care regulatory compliance structures, and so much more.
Karen Owen Gibbs
Partner, McDermott Will & Emery
Years at the Firm: 5
What is your favorite part of practicing health care law?
US health care law is interesting, fast-changing and relevant to virtually every person in the United States. As the health care space changes to incorporate new technologies and adjusts to…
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. When Uber came on the scene, on-demand ride-hailing was only available through taxicabs, and frequently only available in major cities. Now on-demand ride hailing is available through numerous companies and in areas that previously did not have such services available. Ride-hailing companies have also expanded their services offering to include food delivery.
Tech companies entering the health industry today are doing the same thing: reimagining and redefining the fundamentals of consumer access to health care. These companies often have deep insight into distribution and consumer purchasing behavior, and are willing to invest more capital and take on more risk than traditional health industry players in order to explore and develop creative health care offerings. Furthermore, the solutions they are developing don’t just offer incremental improvements—creating a more expensive service or drug option doesn’t cut it. Instead, they want to create dramatic solutions that make health care better overall. Tech companies in the health care space are pursuing innovation that carries value in context of the entire health ecosystem.…
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 existing collaboration, aimed at accelerating the development of an oncology portfolio of each of the parties and to provide patients with more rapid access to new therapeutic options. This extended collaboration will permit Innate Pharma to develop and commercially strengthen its investment ability to develop its immuno-oncology portfolio (IO) and its R&D platform. For its part, AstraZeneca will enrich its IO portfolio with new clinical and preclinical programs. For more information on this collaboration, click here.
CVS + Aetna
McDermott is one of the firms that has advised CVS Health in connection with its $69 billion purchase of Aetna. The transaction, one of this year’s largest M&A deals, is expected to transform the US health care sector. For more information on this collaboration, click here.
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.