1 December 2011Patents

BIO Europe, CCD Congress Centre, Düsseldorf, Oct 31 - Nov 1

The biotechnology industry is changing. A perfect storm of economic constraints, looming blockbuster patent expirations and reduced government budgets mean that companies in the industry are facing new pressures. How they adapt to the changing environment will dictate whether they prosper in the years to come.

Peter Homberg, partner at Raupach & Wollert-Elmendorff and head of Raupach’s Life Science Practice, will be chairing a panel on IP and deal- making dynamics at the conference. It will look at recent developments in IP law, including the impact of the revisions to US patent law, and consider the future of personalised medicine and bio-marker assisted methods of treatment.

As Homberg points out, “there are some changes in the market that have been triggered by pressure on big pharma – there’s a relatively small new product pipeline, expiring patents for “Block Buster Therapeutics”, and new issues with respect to reimbursement. There’s also pressure on the regulatory side.” Big pharmaceutical companies, he says, have reacted quite naturally to these pressures.

There have been significant changes in the licensing and M&A environment as a result. “Big pharma wants to in-license new products, even pre-clinical products, in a way that they wouldn’t have done before,” Homberg says. This sounds like good news for small biotech companies, which might reasonably expect earlier investment in unproven products if the trend continues.

“EARLIER INTEREST FROM BIG PHARMACEUTICAL COMPANIES DOESN’T NECESSARILY TRANSLATE INTO A BETTER ENVIRONMENT FOR SMALL COMPANIES.”

But, he adds, earlier interest from big pharmaceutical companies doesn’t necessarily translate into a better environment for small companies. “There is a consequence on how they structure their contractual documentation for deals,” he says. “There are more agreements that allow big companies to get out of them quickly.

They would like to reserve broad rights for termination [of a licensing agreement], including not just failure of technology, but even things like a change of business focus.”

The panel will focus on these issues, and also take a look at recent developments in the law, especially the passage of the America Invents Act in the US. Additionally, it will take a look of the key cases and regulatory obstacles to development of treatment for some of the planet’s biggest killers, and the discrepancies in law in different countries governing what happens to licensing agreement when the licensor goes bankrupt.

This last point is especially interesting. “In Germany,” Homberg says, “the bankruptcy administrator can choose to terminate the [licensing] contract” in the event of bankruptcy, unlike in, for example, the US. This means that in Germany, there is little security for large companies entering agreements with smaller players.

Some big pharmaceutical companies request IP transfer at a certain stage to head off these risks, but that has implications for the smaller company too, which is likely to be relying on its IP assets to keep shareholders on board.

Homberg says that despite the challenging climate, there are still good opportunities for small biotech companies with good technology in particular fields, while big pharmaceuticals will probably look to diversify their offering over the next few years, perhaps to include generic or veterinary products, in order to keep pace.

The BIO Europe conference starts on October 31. To register, please visit http://www.ebdgroup.com/ bioeurope/

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