LS&HC Horizons 2022 - Flipbook - Page 36
Hogan Lovells | 2022 Life Sciences and Health Care Horizons
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Transactions
Unique issues in cell and gene therapy transactions
Cell and gene therapy transactions have significantly increased over
the last few years in number and complexity and give rise to a number
of issues that merit further attention. Due to concerns oover cell and
gene therapy pricing, there is a growing sentiment that pricing should
be based to some extent on patient outcomes. Typically, “Net Sales”
definitions permit deductions for rebates and chargebacks, but further
modifications may be necessary to ensure that a licensee is permitted
to recoup/offset against future royalty payments any refunds or
payments to insurers/payors as a result of negative patient outcomes.
Typically, royalty terms continue until the later of expiration of (i) the
last valid patent claim, (ii) a period (typically 10 to 12 years) following
first commercial sale, and (iii) regulatory exclusivity. Because of the
complexity of the manufacturing process associated with cell therapy
(which in itself could provide de facto market exclusivity), some
companies are pushing for royalty terms to extend until there is
some biosimilar market entry (or, a longer period).
Penny Powell
Partner, London
With respect to the manufacturing process, given the high cost of
materials (plasmid DNA/cell banks), their long lead times and limited
high spec manufacturing facilities, careful planning of manufacturing
capacity is also key. The impact on platform technologies of
adjustments to specification/process, particularly with respect to
evolving products such as MRNA based vaccines may also need to be
factored in.
We also see differences in the exclusivity provisions. Where cell and
gene therapies are based on platform technologies it may be necessary
to limit the rights being out-licensed to preserve flexibility and
maximize the value of the technology for future deals. We have seen
exclusivity being limited to certain indications, or rights preserved
to the licensor to use the target or binders for other collaborations.
Obviously this has implications both from a regulatory perspective
(risk of data contamination) and the risk of funding technology that
could compete with the collaboration.
Denis Segota
Partner, Philadelphia
