This browser is not actively supported anymore. For the best passle experience, we strongly recommend you upgrade your browser.
viewpoints
Welcome to Reed Smith's viewpoints — timely commentary from our lawyers on topics relevant to your business and wider industry. Browse to see the latest news and subscribe to receive updates on topics that matter to you, directly to your mailbox.
| less than a minute read

Due diligence - the steady constant in a changing deal landscape

As part of our firm's digital white paper, "Outlook: U.S. Health Care 2021", my colleagues Ari Edelman, Sung Park and I authored a piece focusing on the SPAC market, in which we discuss the need to conduct robust regulatory due diligence when utilizing a SPAC to go public.

While the article, "Attack of the SPAC: Success of alternative IPO method hinges on due diligence," focuses on the due diligence process (and potential pitfalls) in a SPAC transaction, the importance of the regulatory due diligence process in any deal cannot be overstated. 

This is particularly true in the health care and life sciences sector, where everything from promotional practices; FDA regulatory compliance concerns (including recalls and adverse event reports) and enforcement; and licensing requirements can easily impact the financial aspects of a transaction, or the ability for a deal to close on time, if at all. 

I hope you consider giving our article a read to learn more about how SPACs are changing the life sciences industry and pitfalls to avoid when conducting diligence during the SPAC acquisition, and other transactions in this sector.   

While the importance of due diligence cannot be understated for any type of deal, the risk that is associated with inadequate or less-than-thorough due diligence is especially great for biotechnology companies because the companies’ products can directly affect their end-customers’ (patients’) health, and because they are heavily regulated by multiple government agencies. The high-risk, high-reward nature of this business means that risks can present themselves at any moment, and proper due diligence must be performed to identify any such risk or signs of such risk.

Tags

spac, fda, due diligence, health care & life sciences