The Life Sciences Report - Winter 2016

Ten Considerations for Companies Evaluating a Pre-Negotiated Acquisition -

In recent years, there has been a shift in the research and development strategy of large pharmaceutical and medical device companies from internal development of new technology to external investment in promising young companies. As opposed to a large company facing scrutiny over the failure of an internal project, funding external development allows these large companies to abandon projects that do not meet expectations at a lesser cost. From their perspective, they want access to technology and a “finger on the pulse” of its development without a wholesale commitment to its costs. One common way to achieve this goal is through an option structure, where a cash payment is made up front to an early-stage company to fund the development of its project(s) in exchange for the right—but typically not the obligation—to acquire the technology or the company in the future. Consideration under these so-called “pre-negotiated acquisitions” often takes the form of a smaller upfront payment upon the acquisition, with more significant contingent payments occurring in the future based on milestones or a certain date.

Please see full Newsletter below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wilson Sonsini Goodrich & Rosati | Attorney Advertising

Written by:

Wilson Sonsini Goodrich & Rosati

Wilson Sonsini Goodrich & Rosati on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.