The 4th Due Diligence Summit for Life Sciences

11 April, 2017

due_diligence_summit.jpgOn May 18-19, 2017 ExL Events will host the 4th Due Diligence Summit for Life Sciences at the Hyatt Regency in Boston. This is the only life sciences event that is focused on the needs of cross-functional due diligence professionals. We recently sat down with Zohaib Sheikh, Senior Conference Director, to learn why this event is so unique.

ShareVault: Tell us what the Due Diligence Summit for Life Sciences is all about.

Zohaib Sheikh: The focus of the 4th Due Diligence Summit for Life Sciences is really on bringing together due diligence professionals in life sciences across functions and providing them with the strategies and insights that are needed to effectively do their jobs. There are many facets and challenges to conducting due diligence and the complexities increase when teams are cross-functional. Our goal is to provide these individuals and teams with the education and tools to ensure successful due diligence outcomes, whether it be a profitable investment in a new product, portfolio, company or strategic alliance.

SV: The summit emphasizes that it’s a cross-functional event. Why this emphasis?

ZS: What we’ve found is that, although organizations engaged in deal making traditionally assemble a due diligence “team,” the team itself is made up of cross-functional members and can be quite segmented. Due diligence needs to be conducted quickly, efficiently and privately, and often there’s never a time for everyone involved to get together and discuss how the process could be improved. IP and legal people might have an opinion on how processes could be accomplished more efficiently on the scientific side, or the business development folks might see room for improvement in another area. There are all these best practices that could be communicated more effectively across the organization, but it’s just not one of those functions where people sit down together and have the leisure to look at what they’re doing effectively. The Due Diligence Summit for Life Sciences provides the rare opportunity for due diligence professionals to convene with their functional counterparts to discuss their individual challenges and the best ways to work across their organization, as well as with external advisors. I’ve seen people that have been in the industry for twenty years come to the Summit and realize for the first time that something is a challenge or problem for a counterpart in the organization, simply because they never had the opportunity or platform to communicate with them effectively.

SV: Does that cross-functional aspect apply across different types of life sciences organizations as well?

ZS: It does. When we recruit speakers, we try to source them from across the life sciences industry. In life sciences, large pharma operates on its own, as does medical devices and small biotechs, and you don’t see much overlap. Obviously, the science facet for medical devices and large pharma is different, but M&A integration has commonalities for any company. Learning business processes from different industries can be very enlightening. It’s a very unique environment, bringing people from different facets of life science under one roof.

SV: What is the primary value add you provide to attendees?

conference3.jpgZS: Our speaking faculty is made up of industry experts from biotechs, academia, investment firms, medical device and big pharma companies. People appreciate the range of perspectives represented at our event, but value the event format even more. While legal advisors and iBankers attend uniquely focused events, this is the one event where everyone gets together in one place to find out what their counterparts are doing and to figure out what they can do to bring more value to their organization. It is also the only conference focused on due diligence, strategic alliances and business development that isn’t a large trade show, allowing attendees to interact and engage with their peers in a more meaningful way.

SV: I’m sure there are dozens of due diligence challenges that companies run into. What are some of the widespread challenges that you see?

ZS: It depends on the size and industry a company is in. For smaller companies, it will typically be a lack of resources. That could force a company to work with external vendors, which comes with its own communication and security challenges. When working with outside parties, it’s always a challenge to strike a balance between securing proprietary information and providing the level of access necessary to maximize the potential of that engagement. Big pharma, on the other hand, has the resources and will have groups dedicated to due diligence activities, but even they won’t necessarily have access to the best person when the time arrives. Sometimes it’s a situation where it’s the wrong person at the right time.

technology1.jpgLarge pharma is also sometimes challenged when confronted with new technologies, because they don’t tend to be especially tech savvy. It’s always harder for pharma to wrap their heads around the use of technology. And, the true innovations that are happening in this space are with innovative technologies, such as CRISPR and gene editing. The landscape is moving toward non-molecule-driven transactions, which has different scientific implications as well as valuation implications. It’s more of a Silicon Valley approach than it is a traditional pharma approach.

SV: You mentioned that the landscape was moving toward non-molecule-driven transactions. What other trends are you seeing?

ZS: We're seeing a lot of interest in global health, or addressing problems that transcend national borders. It’s an area of study that focuses on worldwide health improvement, reduction of disparities, and protection against global threats that disregard national borders. Anti-trust issues also seem to be top of mind right now. And then, of course, uncertainties about the new administration and how that will affect deal making. Changes in regulations can have a titanic influence on life sciences innovations, either by speeding up development or slowing things down. Perhaps one of the biggest topics of conversation right now is around drug pricing. Drug pricing is an issue for politicians, it’s in the news, and it’s being scrutinized by the public.

SV: Are there any trends that specifically pertain to licensing or partnering with other companies?

ZS: One of the results of large pharma’s trend toward consolidating, streamlining and divesting is an increased need for strategic partnerships. R&D hasn’t been paying dividends for large pharma in years. So, we’re seeing a trend toward increased licensing and partnering deals as a way to supplement organic pipeline development. They’re looking at academic institutions, accelerator programs, partnering with small biotechs, and finding ways to empower the people that are at the cutting edge of R&D. Then those people can do what they do best, allowing large pharma companies to do what they do best, which is providing support for clinical trials, regulatory strategy and manufacturing capabilities.

SV: You’ve also started a conference focused on Priority Review Vouchers (PRV). Can you tell us a little bit about PRVs and the conference?

PRV_image.pngZS: Yes, the Priority Review Voucher program is extremely interesting. It’s an FDA program intended to incentivize companies to develop new treatments for neglected tropical and rare pediatric diseases—areas that generally lack commercial viability and do not typically garner development interest from drug companies. These incentives come in the form of special vouchers, which allow a company to have any one of their future drugs reviewed under the FDA’s priority review system, essentially changing the regulatory pathway.

Usually it takes the FDA about ten months to look at a drug. With priority review status, it takes just six months. So, that’s four months earlier that the company can start accruing revenue, not to mention potentially obtaining market exclusivity. These vouchers can also be transferred to other drug companies and have been sold for up to $350 million. So, it’s a very interesting alternative business model. As an example, an investment foundation or venture capitalist could seed a small biotech, say $10 million, to develop one of these rare or neglected treatments that are on the FDA’s list. Once that drug is developed, the company would be eligible for a PRV, which could be used to expedite a more lucrative drug to market or sold for potentially thirty times the original investment.

The Priority Review Voucher Summit is a two-day event that helps attendees understand the benefits and challenges of developing a drug that would be eligible for a PRV and provides attendees the opportunity to network and engage with leaders from pharmaceutical companies, social enterprises, patient groups, government agencies, and the investment community to create the best development strategy for organizations interested in pursuing this pathway.