Life Sciences Industry Team

Life sciences companies—the organizations that improve human life through medical advancement, next-generation medical treatments, and scientific breakthroughs—face a series of specific hurdles in their quest to innovate and thrive. Those hurdles are something Scott D. Marty, Ph.D. and Ryan J. Udell know well. As co-leaders of Ballard Spahr’s Life Sciences Industry Team, they’ve shepherded countless clients beyond challenges and toward opportunities. Here, they share what they see as the primary factors driving challenge and change for the life sciences industry.

Funding, Funding, Funding

“Funding is always an issue, but that seems to be even more true post-COVID,” Dr. Marty said. “This is still an overhang for pre-clinical work and market slack. We’ve been living the last two years in a reaction to that.”

It hasn’t helped that the funding market has been roiled by the troubles of Silicon Valley Bank and high interest rates.

“The deals that are getting done are bigger deals,” Mr. Udell said. “You have these venture funds backing CEOs who have a track record of success, and that’s leaving the traditional ‘I’m a scientist with a good idea’ entrepreneur out in the cold.”

The Upcoming Patent Cliff

Between 2023 and 2030, hundreds of patents for popular medications will expire, cutting off vital revenue that biopharma companies use to develop new medications and advance human understanding through research and development. Pharmaceutical Commerce said it “could be one of the biggest patent cliffs that we’ll observe in the market.”

“When companies can’t count on revenue from successful products, they naturally take a more cautious approach to capital outlay,” Mr. Udell said. “That makes it all the more important that life sciences organizations understand the value of their intellectual property, take steps to protect it, and understand how much value it has and for how long.”

At the same time, the patent cliff presents an opportunity for forward-thinking companies nimble enough to see opportunities where others might stumble.

“For some middle-market companies, this might mean there are chances to bring to market biosimilars or generics,” Dr. Marty said. “Or it might mean the time is right for licensing or acquisition—young companies that have grown enough to provide value could welcome interest from a larger company that wants to replenish its post-expiration pipeline.”

Under the Microscope

Even for established life sciences companies, the path forward is never free of obstacles. Antitrust regulators are increasingly taking a closer look at life sciences companies and asking questions about monopoly concerns, drug-pricing collusion, and other anti-competitive practices. Ballard Spahr antitrust litigators have represented global life sciences companies as both plaintiff and defendant in litigation with billions of dollars in damages on the line.

“For life sciences companies at this stage, not approaching regulatory scrutiny the right way would be like tripping at the finish line,” Dr. Marty said. “The very future of the company could be at risk, and it’s not something to take lightly.”

Room to Grow

Life sciences companies have real estate needs that are more specific than the average organization.

“These companies do a lot of cutting-edge research, and it’s not easy to find the right space to do that,” Mr. Udell said. “For example, if you need a wet lab, you have to find a building with the right footprint, and the use has to be compliant with local regulations, like zoning and disposal.”

Commercial real estate company CBRE has called life sciences real estate “a red-hot market,” noting that newly built lab space has been slow to come online, and demand for life sciences companies’ output means that many companies don’t have the luxury of waiting. When the market is tight and the timeline short, negotiating the right lease is crucial.

“When the real estate attorneys on our Life Sciences Industry team have helped clients nail down the right space, it’s a great feeling,” Dr. Marty said. “That’s when we know they’re in the position they need to be in to continue their groundbreaking work.”

Beyond Challenges and Toward Opportunities

Dr. Marty, Mr. Udell, and the attorneys of the Life Sciences Industry team use their firsthand knowledge of the life sciences lifecycle to connect clients to the services they need, when they need it.

“We can support a life sciences company in all aspects of their legal needs,” Dr. Marty said. “We are built to serve life sciences companies, from when it’s just a spark, through the many stages of growth, to when it becomes a global leader.”

"If you look at the majority of our life sciences teams, they are people who want to grow with the company,” Mr. Udell added. “They need someone to help them make strategic decisions on growth or divestment. From labor and employment to litigation to corporate matters, we have the right team to address the issue at hand.”