Hanneke Later-Nijland is an attorney-at-law and a trained pharmacist from the Netherlands who recently launched The Genotype Network, a network for corporate and regulatory lawyers specialized in life sciences.
Describe the purpose of the network?
“The purpose is to add value, and more specifically to advance transactions in the life science space in every aspect, next to securing life science regulatory law as a building block in these transactions.”
Who can join and what can they expect?
“It is meant for two “genotypes” of lawyers; corporate (M&A) lawyers and life science regulatory (Regs) lawyers. In general, European corporate lawyers are somewhat less specialized compared to their US counterparts. For example, in the US there are life science transactional lawyers, lawyers dedicated to life sciences. So, this is where our network comes in.”
It enables M&A lawyers to pitch more confidently, as they will have the life science expertise at their fingertips.”
“It enables M&A lawyers to pitch more confidently, as they will have the life science expertise at their fingertips. Moreover, as I have a double background myself, I have always experienced the non-proportional added value of being able to tap into the two worlds.”
Why is collaboration between regulatory lawyers and M&A lawyers important within life sciences?
“We are on the verge of harvesting the fruits of the Bio Revolution and deals in this sector are becoming increasingly complex, and therefore need regulatory prowess. Our goal is to provide access to highly specialized and experienced regulatory lawyers on a global scale. In this way, corporate and regulatory lawyers shall work on a deal together much more smoothly and efficiently than ever before. So, together we ensure that the buy-side performs the most optimal due diligence possible, including more innovative analyzes of the target. With the latter, I mean that in the context of cell and gene therapy or biomaterials, we preferably work with technical experts too. Moreover, even the largest global law firms do not have this type of life sciences expertise in each jurisdiction, but this network does.”
What issues can the network help to solve?
“In several (confidential) cases we have seen that the regulatory status of a product as can be derived from the information provided does not always exactly coincide with what the buyers expect or assume. Several public cases also show that the physical material (or biomaterial) of a medical device can be disastrous for a buying company. I am for example thinking of Philips’ Dreamstation, where the foam appeared to be toxic. They wrote down 1.3 billion EUR on the value of the sleep apnea business and the shares fell to their lowest in a decade. Now, that is rather a nightmare, perhaps even an unintended Trojan horse, but in the end we have seen more issues with medical devices and (bio-)materials, for example when it comes to hip prostheses.”
“Personally, I think it shows that the costs come before the benefit; a thorough due diligence is sensible before you take the leap. However, you have to make sure that you select the right professionals. The lawyers in our network are though leaders in the life science sector with at least a decade of experience. Moreover, they know how to draft the regulatory milestones in an efficient manner.”
What issues within the European life science industry would you say are most topical right now for this network to handle or discuss?
“There are so many biotech companies working on sophisticated medical solutions, but the regulatory status of their product is not always clear-cut (to them) from the outset. Therefore they do not know (yet) in which regulatory framework they will find themselves eventually, which is the multiples-phase, so the relevance thereof can hardly be understated. Investors and buyers may feel slightly insecure about the regulatory status and connected issues – even more when it concerns Bio Revolution-type of therapies, which may lead to that becoming a galvanized issue – jeopardizing the deal.”
“McKinsey rightly wrote in its Bio Revolution report (13 May 2020) that this surge of innovation in biology entails profound risks. Biology is self-replicating, there may be unintended consequences or cascading effects that do not respond to jurisdictional boundaries, and it’s generally too early for widespread consensus on moral questions accompanying such techniques.”
What are your expectations for the future of the European life science industry when it comes to investments, M&As, growth, and global competition?
“Competition between large pharma companies and institutional investors, VC, IPOs, etc., may remain high. Furthermore, particularly the medium-sized biotech companies, those working on and with cell and gene therapies and platforms, will remain very attractive, especially those focusing on unmet medical needs.”
Furthermore, particularly the medium-sized biotech companies, those working on and with cell and gene therapies and platforms, will remain very attractive, especially those focusing on unmet medical needs.”
“During the COVID-19 pandemic, the general thought was to bring pharmaceutical manufacturing closer to home, but in the Netherlands, a Dutch generic manufacturer just went bankrupt, so I am not sure this goal is still in sight. In the end, personnel costs etc., are high here. Lastly, on COVID-19, it seems likely that that growth is declining, so COVID-19 vaccine manufacturers will go towards a diversified portfolio, which is likely to entail acquisitions of companies harnessing and embracing the Bio Revolution.”
What is your best advice to a European life science company when it comes to performing a successful deal?
“Obviously, the target should fit into your (long-term) strategy. In some cases, a Transactional Regulatory Scan prior to a Letter of Intent/Memorandum of Understanding is advisable. In general, a clear regulatory strategy from the outset is essential. You should have an accurate picture of IP, patent life, future options, etc. Obviously I cannot stress enough the value of a proper due diligence. In the case of a cross-border deal, engage specialized lawyers from the relevant jurisdictions. Clearly, you need a sound understanding of the multiple look in the context of pricing and reimbursement across jurisdictions.”
The lawyer skilled in the art of life sciences deal-making is a fictitious person consisting of a team of lawyers. The team consists of a M&A lawyer with uncurbed access to a full-blown life science regulatory lawyer and last, but definitely not least, a patent lawyer with a life sciences focus.”
What competencies should a life science company seek in a lawyer helping them with a transaction?
“Let me use an analogy from patent law: The lawyer skilled in the art of life sciences deal-making is a fictitious person consisting of a team of lawyers. The team consists of a M&A lawyer with uncurbed access to a full-blown life science regulatory lawyer and last, but definitely not least, a patent lawyer with a life sciences focus.”