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How to Successfully Navigate Regulatory Landscape of Mergers & Acquisitions in Life Sciences?

27 Jan 2023
The life sciences industry has a history of engaging in mergers and acquisitions (M&A). However, in recent years, there has been a surge in M&A activity. This is evidenced by the rise in the number of deals 1  globally, which went from 457 at the beginning of 2019 to 683 by the end of 2021. The United States is the most active region for these deals, followed by China and Japan 2 

Several factors have contributed to and will keep on fuelling this trend

Reduce costs of product development
Expand product portfolio
Expand to new therapeutic categories
Increase market share
Gain access to Innovative Technologies
Access to a new region

While companies anticipate benefits from M&A, it is essential to recognize that these transactions also come with their own set of challenges. One such challenge is the increased workload on Regulatory Affairs. In order to maintain compliance and avoid disruptions, it is crucial to obtain all necessary approvals before, during, and after the M&A process.

Regulatory professionals face unique challenges while going through an M&A

Managing the regulatory approval process
Maintaining compliance
Managing risk
Managing change
Ensuring continuity of regulatory activities

Preparing for change: Top considerations in M&A from a Regulatory vantage point

HEALTH AUTHORITY(HA) / MARKETS: Consider new markets in scope for regulatory submissions to ensure in-house competency is prepared to support those markets to engage with HAs and understand their requirements, submission fees, and timelines.
PRODUCT CLASS: New product types and classes will require in house competency to ensure preparedness on expertise to support those products. These could include medical devices, combination products, generics, and biosimilars.
THERAPEUTIC EXPERTISE: An M&A may allow a company to enter a new therapeutic area. The knowledge of those indications under study might require an extensive backdrop of expertise, literature review, and knowledge of the mechanisms of action for the assets being acquired.
COMPANY NAME: A change in company name must reflect on labels/artwork as well as other collateral presented to prescribers and patients. The license holder transference will require a time-bound registration with HAs and then an update of the relevant content.
MANUFACTURING SITE: A change in ownership of assets may also include transference of manufacturing which then requires a comprehensive CMC update to the dossier submission.
REGULATORY INFORMATION MANAGEMENT: Product information across systems needs to be evaluated. Considerations for data associated with the submission and a playbook to onboard that information needs coordination between regulatory and IT. The transference of information will ensure proper traceability of manufactured products, IDMP, and other important information.
DOCUMENT MANAGEMENT: Frequently, systems of use for submission content do not align in information from one system to another. Migration of content and metadata may require content in a document repository with a migration plan that can include both ETL(Extract, Transform, Load) and manual efforts.
PRODUCT LICENSING: The transference of license due to a name change, and MAH requires a regulatory notice to HAs. Knowing the HA-specific requirements is paramount to ensuring this is managed in a timely and accurate manner.
INTELLECTUAL PROPERTY AND MARKET AUTHORIZATION HOLDING: The transfer of intellectual property can be complex, and knowledge of agreements with 3rd parties authorized to manage the license in specific markets needs to be understood to ensure the ownership of both the IP, maintenance of HA obligation and any License Partner agreements is managed.

To sum up, the likelihood of M&A activity in the life sciences industry continuing in the near future is high, as it is driven by various factors. Even though M&A activity can bring definite benefits, the key to achieving desired outcomes is navigating through regulatory requirements successfully.

Do not hesitate to contact us if you are looking for more information on M&A-related regulatory procedures.

Authors

Vladimir Penkrat
Vladimir Penkrat
Chandan Malaker
Chandan Malaker

References

1.
https://www.pwc.com/gx/en/services/deals/trends/2022/health-industries.html

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