Archives: Transactions

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The Risks of One-Way Jurisdiction Clauses and Unilateral Arbitration Clauses

One-way jurisdiction clauses are becoming more prevalent in medical devices related transactions where, by way of example, licensors want the flexibility to deal with patent related disputes in the courts of the country where the patent is applied for or granted.  A one-way jurisdiction clause requires that one of the parties to a contract must … Continue Reading

Challenged Airline Merger Carries Lessons for Medical Devices Acquisitions in New Era of Premerger Scrutiny

According to news and industry sources, healthcare mergers and acquisitions are on the rise in 2013. In fact, there have reportedly been at least 49 such transactions in the medical devices field alone so far this year. Companies seeking to enter into or expand their presence within this burgeoning marketplace should proceed carefully, however, because … Continue Reading

Challenging Issues Confronting CoDx Transactions – Part 3 (Regulatory Strategy)

This is the third entry in our series on Challenging Issues Confronting Companion Diagnostics Transactions. The first entry (Introduction) is available here and the second entry (Financial Structures) is available here.  Regulatory Strategy One of the challenges facing pharmaceutical companies and diagnostics companies in companion diagnostic transactions is determining the appropriate contractual framework for executing on … Continue Reading

Challenging Issues Confronting Companion Diagnostics Transactions — Part 2

This is the second entry in our series on Challenging Issues Confronting Companion Diagnostics Transactions. The first entry is available here. Financial Structures in Companion Diagnostics Transactions Pharmaceutical companies and companion diagnostics companies traditionally have very distinct business models, which can pose a challenge when it comes to aligning on the financial components of a development … Continue Reading

Challenging Issues Confronting Companion Diagnostics Transactions – Part 1

Overview The market for companion diagnostics has been growing steadily for a number of years, with some sources estimating that global companion diagnostics market will reach $19.3 billion by 2023.  There are a handful of companies that are major players in both the pharmaceutical and companion diagnostics spaces, as well as a number of smaller … Continue Reading

MAC/MAE Clauses in Medical Device Deals

Material Adverse Change (“MAC”) or Material Adverse Effect  (“MAE”) conditions permit a buyer to terminate a transaction if there has been a material adverse change in the target’s business prior to closing.  MAE clauses are prevalent in M&A agreements, and medical device deals are no exception.  MAE clauses received widespread attention after the terrorist attacks … Continue Reading

Device Companies May Seek an Increase in Federal Supply Schedule Contract Prices to Accommodate Device Tax

As we’ve previously described, Section 4191 of the Internal Revenue Code imposes a 2.3% excise tax on the sale of certain medical devices by the manufacturers/importers of the devices.  In December of 2012, the Internal Revenue Service (IRS) issued final regulations and interim guidance regarding the determination of sale price and other issues related to … Continue Reading

Contingent Consideration in Medical Device Deals

Contingent consideration mechanisms, or earn-outs, can be an effective tool in medical device deals to address valuation challenges that arise from the inherent developmental and regulatory uncertainty of the medical device industry because they allow the parties to link a certain portion of the deal value to the achievement of defined targets or milestones.  Since … Continue Reading

Medical Device M&A: Best Practices for Due Diligence

Merger and acquisition (M&A) activity in the medical device space has slowed in recent years, but is poised to take off in 2013.  The medical device industry faces a complex and ever-changing regulatory environment, and it is critical to understand and assess these regulatory risks when evaluating potential medical device deals.  An acquirer can identify … Continue Reading

ABA Section of Science & Technology Law Creates New Medical Devices Committee

The medical devices industry is a global industry at the forefront of medical technology and innovation.  And the ABA’s Section of Science & Technology Law (SciTech) explores emerging issues at the intersection of law, science, and technology.  This fall, SciTech launched a new medical devices committee to advance public understanding and shape the development of law and … Continue Reading