I was pleasantly surprised by how much l learned at the McDermott Will & Emery Life Sciences Deal-making symposium last week. I don’t say that by inferring I know a lot, in quite the opposite, but what I mean is that a lot of conferences and events are the same content but with different names for each panel. This conference was different, I took more notes than I can ever remember and walked away thinking I better understand the challenges that are faced in life science deal making. I also realized what a small part insurance is but if used properly can help get a deal across the finish line.
The event was a mix of attorneys, investors and of course companies in the life science space. There were also a few service providers (my company, Alliant, being one of them) that helped underwrite the event as you would expect. Investors included angel investors, family offices, corporate venture, private equity and venture capital, so a little bit of everything.
So what were the takeaways? Here are some of the highlights:
- Vertical Integration can be a challenge as there are anti-trust issues
- Legal bar for getting deals done is getting higher. Due Diligence quality is going up but the quantity is going down.
- Reps & Warranties coverage is now part of almost every deal and for the most part makes getting deals done easier. However, it does bring another party (insurance company) into the equation which can add some challenges (Shameless plug – I can help place this coverage for you)
- The recent Akorn/Fresenius decision was surprising and could have implications for other deals down the road. This case allowed Fresenius to exit the deal because of a Material Adverse Change, believed to be the first time a court has allowed this. You can read about it here.
- Having strong patents is very important and can be instrumental in getting a deal done. Alliant spoke on a panel and discussed patent insurance which for most of the audience was something they never heard of or even knew existed (another shameless plug – I can also help you understand this coverage and place it on your behalf).
- Non-dilutive funding is out there, but don’t become a slave to it.
- If you are a company raising money you should you know the answers to these questions – How much? What is the money for? What is the valuation of the company? What is the inflection point that you are hoping to reach?
A learned a bunch more, but wanted to share some of the hig
hlights, at least for me, about what I learned. A big thanks to McDermott for hosting the event and letting us at Alliant partake.