- Life science has always been a core focus for international law firm Covington, with more than 250 of its 1,000 plus-strong team of lawyers and advisors actively practising in the life sciences industry.
- The firm draws on its deep experience in the sector to advise life sciences companies on a wide range of complex issues, while its lawyers take a collaborative approach to provide clients with cross-disciplinary expertise across jurisdictions.
- Biotech and Money spoke with Brian Kelly, Partner, Regulatory, James Gubbins, Partner, Corporate, and Lucinda Osborne, Partner, Life Sciences Transactions (pictured below, left to right), to learn more about the scope of Covington’s capabilities in life sciences and to discuss the legal implications of issues facing the sector, from clinical trial data transparency to Brexit.
The life sciences sector is a key component of Covington’s practice, encompassing the full breadth of corporate, commercial, regulatory, transactional, and intellectual property (IP) expertise required to support companies at all stages of their development. This ranges from services for emerging companies, such as the IP, corporate and regulatory issues surrounding a spin out or Series A financing round, to structuring a deal between a growing company and a large US-based pharma company, for example, through to M&A activity or an IPO, and everything in between.
A collaborative culture
Lawyers at the firm work closely with their international counterparts to ensure clients receive expert support across disciplines and jurisdictions, whether that be assistance from the US regulatory team for a company conducting a transaction in the US or from the dedicated capital markets team for a company looking to go public. The global nature of the firm’s approach also mirrors the needs of the life sciences companies it serves. “Having an international practice, having a team in London, on [the US] East Coast and West Coast, and in Asia, who encompass that regulatory capability, IP capability, and corporate expertise, means we can provide help and assistance on a real global basis,” explains James Gubbins, Partner in Covington’s corporate practice. “Our clients, from a very early stage, are very international in their outlook.”
Of course, close co-operation between colleagues in different time zones also has practical advantages. “We inevitably work on very aggressive timelines, so it can be very helpful to have people across office teams that are able to keep everything moving,” notes Lucinda Osborne, Partner in the life sciences transactions team. Yet, for Covington, cross-border and cross-discipline collaboration is not just a sound approach, but a part of its ethos. “The firm works very hard to keep the culture of one firm, one approach,” adds Osborne.
Of the 1,000 plus lawyers and advisors at Covington, over 250 are active in the life sciences sector. Osborne says: “One of the differentiating points of the firm is how many of us spend such a large proportion of our working lives working with life sciences companies.” This includes lawyers who focus on practice areas that span a variety of industries, such as employment law, thus contributing additional layers of specialist knowledge and sector experience to the services the firm delivers to life sciences companies.
Assisting with venture capital transactions
As well as a full-service offering for life sciences companies, Covington also works with life science-focused investors, including venture capital (VC) and corporate venture capital (CVC) firms. The venture capital practice assists both UK-based and international investors who are investing into a UK company, offering services such as the negotiation of investment documentation, due diligence, and guidance on the risks involved in an investee company’s current corporate structure or agreements that it has entered into, says Gubbins. He adds: “Part of it is looking at corporate structures to ensure that as the company develops or if there may eventually be an IPO or trade sale – whatever the exit plan may be – that the documentation is fit for purpose and works as and when the company is looking to implement that core transaction.”
Approaching issues from all angles
The firm’s experience with a range of company profiles and stakeholders in the life sciences sector enables it to offer comprehensive insight to those it works with. Osborne explains: “Because we work with very small start-up entities, VCs, trade associations, medium-sized companies, and also big pharma, we get to see things from a lot of different angles. We will use the expertise we have internally to benchmark and make sure our clients are getting the best service they can.” This breadth also helps the firm deliver an experienced perspective on the various challenges and issues clients are facing. “[It’s about] making sure our clients are as fully informed as they can be to make commercial decisions,” Osborne says. “Ultimately, they’re the ones that know their business, but we work with them to understand what their immediate requirements are and [their] longer-term [needs] and try and balance those competing forces.”
Regulatory challenges to watch
Covington’s life sciences team also specialises in litigation and regulatory work. It has recently represented clients in a precedent-setting dispute regarding clinical trial data transparency in Europe, explains Brian Kelly, Partner in the life sciences regulatory practice. Three cases, PTC Therapeutics International vs European Medicines Agency (EMA), MSD Animal Health Innovation and Intervet International vs EMA, and Pari Pharma vs EMA, revolve around third-party access to documents submitted to the EMA in relation to applications for marketing authorisation. Covington has been acting on behalf of the applicants in the former two cases to challenge the legality of the EMA’s Transparency Regulation, (EC) No 1049/2001, on the basis that the documents contain commercially confidential information. On 5 February 2018, the General Court ruled in favour of the EMA. However, that may not necessarily mark an end to disputes about the disclosure of commercially sensitive data under the Transparency Regulation.
Other areas to watch include litigious activity in the rare diseases space, where prices can be particularly high. “We’re seeing a lot of controversy there and some spin-out litigation as a result of disputes on pricing and reimbursement,” says Kelly. “It will be interesting to see how that plays out in the future.”
The legal implications of macro events and trends
Outside of litigation, there are also some broader trends and macro events that are affecting the type of advice and services life sciences companies are seeking from legal experts. Unsurprisingly, one such event is the UK’s decision to leave the EU. Brexit brings with it some key considerations for life sciences companies, both large and small. Kelly explains: “One is whether the company that holds [EU] drug approval is based in the UK or has a supply chain that goes through the UK. Because [the UK] will be outside of Europe, that will have an impact on their ability to continue marketing in the EU.
“The other concern, which is particularly relevant for the rare diseases space where there may be only a handful of patients, is the UK will be overlooked in terms of classic phase one launch markets in Europe. Typically, companies will look at Europe or key jurisdictions in Europe as their phase one launch market, but if the UK is outside of the EU and requires some additional administrative or otherwise drug approval process then it may just not be a priority for companies.”
Until recently, Covington’s Brexit-focused work had largely centred on monitoring developments and advising clients, but this has begun to change. “Now, certainly as of the last couple of months, we’re seeing companies needing to react and we’ve moved from just talking and keeping clients up to date on this to actually handling some of the governance arrangements they need to transfer out of the UK,” says Kelly.
In addition to political and economic drivers, Covington’s regulatory expertise is also being called on in relation to the rise of digital health. As companies employ digital innovations to add value to their portfolios, to engage with healthcare professionals or to monitor and treat patients, they may encounter certain regulatory obstacles. “A key regulatory challenge, looking at it from a pharmaceutical company [perspective], is often that some of the software being developed has algorithms in it that can help make treatment recommendations for doctors or prevent or monitor a patient’s condition,” notes Kelly. “There, you suddenly rub up against medical device legislation in Europe, the US, China, and several other jurisdictions.” The firm works with companies to analyse these software-based offerings in order to ascertain whether such legislation applies.
Addressing sector shifts and intricacies
Meanwhile, from a corporate standpoint, Covington is seeing an increase in life sciences companies with a project-based outlook. Rather than taking a traditional development approach or aiming to eventually bring their products to market, these companies often operate with a more pared down scientific and management team and outsource a number of services, says Gubbins. “They are very much looking to drive a project or projects to the point of clinical success where they believe, at that point, the project will become of great interest to larger pharma and an exit either via way of a licence or collaboration deal, some form of option deal or the sale of the company, will be the way forward,” he adds.
Regardless of a company’s overarching objectives or the difficulty of the challenges they may face, Covington’s life sciences team looks to work through these and provide solutions. As Gubbins notes: “Helping companies in this sector, whether big or small, with the complexity of the issues they face, whether that be financing, the courts, regulatory, IP, tax, domestic or global [issues], is what we do in our business wherever we operate.”
Learn more: Covington will host Biotech and Money’s next quarterly networking event, Biotechs and the City Spring, at its offices on the Strand, London, on Thursday 22 March 2018. The evening function will include a panel discussion on option deals structured as collaborations with an option to purchase, and other trends in life science deal-making, featuring speakers from AstraZeneca, Covington, Heptares, and Medius Associates. Reserve your ticket.
Feature image © Garry Killian – stock.adobe.com