Legal 101 for Biotech

As part of its workshop series, BCS held two legal 101 workshops for startups and entrepreneurs. These were held on August 5 and 25, 2020 and provided a comprehensive understanding the various license and service agreements and different types of alliances a startup might enter into. These workshops were led by Dr. Lila Hope, Partner at Cooley LLP. Dr. Hope discussed a biotech company’s timeline in relation to product development and summarised the different third party agreements a company might contract along the length of this timeline. These agreements could range from research collaborations, sponsored research agreements, technology licenses, engagement of service providers, MTAs to corporate partnerships.

In the first part of the Legal 101 series, Dr. Hope discussed the different licenses which are fundamental to starting, running and growing life science startups. This session was moderated by Dr. Mayura Wagle.

In the second part of the Legal 101 series, Dr. Hope discussed strategic partnerships and product collaborations, which are common routes for a biotech startup to benefit from the financial and operational support from pharmaceutical companies. Aligning with strategic partners is an important step for a life science start up as it comes at a crucial time when the product is in mid- to late-stage development or about to enter the market. This session was moderated by Dr Wong Han Teng.

Both workshops were well received and had a mix of participants from the MedTech, biotech and academic fields.

Key takeaways from this workshop series:

• Fundamentals for a successful startup to be successful
  1. Understanding the IP landscape and having an IP strategy
  2. Path to commercial viability- to survive as a company one needs to think about product – first-in-class, best-in-class, competitive landscape, pricing, and profitability
  3. Team building
     1. Employees: it is very important to document an employee’s prior IP/inventions and make sure they are not using it in your company without authorisation
     2. Consultants
• Advisors (Scientific)

4. Funding sources

• Licences
  5. Sponsored research with university
     1. IP generated from Biotech sponsored research with university is generally owned by the university (or co-owned by university and sponsor), subject to the sponsor’s option to obtain an exclusive license.
  6. Research collaboration with another biotech or pharmaceutical company
     1. It is never too early to do research collaborations
     2. “who does what” and “who pays” are important questions in research collaborations, as it is key to understanding who will generate critical IP
• In-licencing of foundation technology is often the single most important agreement for a start up! This needs to be drafted carefully with the help of a lawyer. 

• A hallmark of service agreements/vendor agreements is company-held ownership of the deliverables and IP generated. If service provider’s background technology has been included in the deliverables, the startup should also have a license under such background technology to use/exploit this deliverable.

• Manufacturing and clinical trials come under “special service agreements” in that they are more complex than the typical service agreements and have unique clauses, such as forecast and ordering, product warranty, patient privacy, subject injury, ethical board approval and many others.

• The following are different types of strategic alliances (and tend to be combined in a deal)
  • Product license – product has to be mature enough to do an agreement (sometimes IND readiness is enough but often after clinical proof-of-concept)
  • Platform collaboration – these tend to be early in the life science company’s timeline. Exclusivity obligations (such as target exclusivity) and economics of the deal are important factors to consider when entering into platform collaborations with a partner.
  • Discovery and option agreement – need some proof of concept studies before doing an agreement. The “scope” of these agreements should be defined clearly.