What diligence focuses on
Life sciences transactions are valued on assets that are hard to see: patents and know-how, clinical data, regulatory standing, and manufacturing relationships. Buyers and investors want to confirm that the company actually owns or controls its key intellectual property, which means reviewing assignments from founders, employees, and academic collaborators. Correspondence with the FDA, inspection history, and clinical trial records are checked for anything that could delay approval. Contracts with research and manufacturing vendors are reviewed for change-of-control terms and supply risk. Problems found late in diligence tend to cost more in negotiating leverage than problems disclosed early.
How deal terms share the risk
Because development outcomes are uncertain, a large share of the price is often paid through milestone payments or contingent value rights that depend on future regulatory or sales events. The wording of those milestones, and any duty the buyer has to pursue them, is a frequent source of later disputes. Representations about regulatory compliance, data integrity, and IP ownership are heavily negotiated, along with how long they survive and how losses are recovered. Larger deals may require antitrust filings, and investment by foreign buyers in certain biotechnology companies can draw review from CFIUS. Collaboration agreements also need governance terms, such as joint committees and decision rights for when the partners disagree.
Getting ready before a term sheet
Companies that organize their records before a deal usually move through it faster and with fewer surprises. A data room with IP assignments, key contracts, regulatory submissions, and board materials is a reasonable starting point. We review the proposed structure, the counterpart's diligence requests, and areas where your records may be incomplete. We also discuss the terms that matter most to your stakeholders, whether that is upfront cash, retained rights, or continued involvement in development. From there we plan the work so that legal review keeps pace with the business negotiation.
