[Herald Interview] Due diligence on partners crucial for Korean biotech out-license deals
Joshua Hofheimer, a partner and co-head of Global Life Sciences industry group at international law firm Sidley Austin, speaks in an interview with The Korea Herald on Aug. 3.
Korean biotechnology firms hoping to ink successful deals with foreign pharmaceutical companies must fully comprehend their potential partners’ A to Z’s, a legal expert in out-license deals said.
“(Global big pharmas) want something that’s going to be successful and hopefully innovative, and both help patients and provide care, but also be valuable and create profit for the company,” Joshua Hofheimer, a partner and co-head of Global Life Sciences industry group at international law firm Sidley Austin, told The Korea Herald in an interview last week.
“That part’s table stakes. But a lot of what they are looking for is control over the development and flexibility with respect to the timing and how the process is managed. That creates tension for the Korean partner,” he said.
The legal advisor explained that if the licensee does not advance the technology quickly, it would diminish the value of the asset for the licensor. He underlined that Korean biotechs looking to strike a deal with technology is working against the clock as their patent protection for the technology will eventually expire if developmental progress lags.
In order to protect themselves and make the most out of out-license agreements, Hofheimer pointed out that Korean biotechs should do a lot of due diligence and research on their potential partners.
“(Korean biotechs) have to understand what (the foreign partners’) goals are and what their quality is as well as what is their reputation as a life sciences partner. What’s their competitive portfolio look like? Are you solving an unmet need for them or are you giving them more than one shot on goal?” said Hofheimer.
“You have to fit into a window of opportunity. There are different motivations in your partner and you have to understand that going into the negotiations so that you can think about how to protect yourself from different ways as the licensor to maximize the opportunity for success,” he added.
Hofheimer handled two of Korea’s 10 largest technology out-license contracts last year. He helped AprilBio ink a $462 million deal, as well as an upfront payment of $16 million with multinational pharma Lundbeck. The legal advisor also aided ImmuneOncia to reach an agreement with Chinese firm 3D Medicines for an upfront payment of $8 million and eligibility to receive up to $462.5 million.
More Korean biotechs have succeeded in negotiating out-license deals with foreign companies in recent years.
The total value of Korean biopharmaceutical companies’ 32 out-license technology deals exceeded 13 trillion won ($9.97 billion) last year, after the figure surpassed 10 trillion won for the first time in 2020, according to Korea Pharmaceutical and Bio-Pharma Manufacturers Association data.
By Kan Hyeong-woo (email@example.com