Presentation by McDermott Will & Emery at Medtech Conference 2016.
Participant:
Kristian Werling, Partner – McDermott Will & Emery, LLP
Powered by:
Healthegy
For more healthcare innovation
Visit us at Healthegy.com
Deze publicatie gaat in op de risico's met betrekking tot het inkoopproces bij bedrijven actief in de Consumer Goods & Retail markt. Ook wordt ingegaan op hoe bedrijven deze inkoopfraude risico's zouden kunnen reduceren met behulp van technologie en het uitvoeren van supplier audits.
Dmiexpo 14 - Panel - Banking, Regulation and GDPR: What should digital mark...Morning Dough
Alisa Berezutska - Krypton Events CEO
Tal Itzhak Ron - CEO and Chairman, Tal Ron, Drihem & Co., Law Firm
Stephanie Attias - Global Head of Regulation, Tal Ron, Drihem & Co., Law Firm
Genia Gurevich - Head of Singapore and Vanuatu Operations, Tal Ron, Drihem & Co, Law Firm
Maayan M. Dana-Nir - E-commerce Entrepreneur and Lawyer, Tal Ron, Drihem & Co, Law Firm
Understanding Procurement Fraud by Tommy SeahTommy Seah
Dear Delegates,
Purchasing fraud is on the rise. Companies today do not just face risks from internal fraud but also
from external criminals who are technologically savvy. The important role on combating fraud plays in
minimising financial losses is fast gaining ground. CFE-In-Practice experts is providing you
with practical advice on how to “look for red flags” and symptoms of fraud. Discover
why some numbers do not add up. Mitigate this fraud risk management by learning
the latest strategies that can be adapted to your company. This event will also cover
investigation and prevention, most importantly how to structure your business processes to minimise
the risks whilst maintaining operational efficiency.
Recognising the challenges that organisations are facing in combating Purchasing Fraud, CSI
In Practice is pleased to present this 2-days Workshop on Understanding Procurement Fraud -
Investigation & Resolution. This will serve as an excellent opportunity to learn how best to conduct
an internal investigation to protect your organization and step up on controls to deter fraud.
Deze publicatie gaat in op de risico's met betrekking tot het inkoopproces bij bedrijven actief in de Consumer Goods & Retail markt. Ook wordt ingegaan op hoe bedrijven deze inkoopfraude risico's zouden kunnen reduceren met behulp van technologie en het uitvoeren van supplier audits.
Dmiexpo 14 - Panel - Banking, Regulation and GDPR: What should digital mark...Morning Dough
Alisa Berezutska - Krypton Events CEO
Tal Itzhak Ron - CEO and Chairman, Tal Ron, Drihem & Co., Law Firm
Stephanie Attias - Global Head of Regulation, Tal Ron, Drihem & Co., Law Firm
Genia Gurevich - Head of Singapore and Vanuatu Operations, Tal Ron, Drihem & Co, Law Firm
Maayan M. Dana-Nir - E-commerce Entrepreneur and Lawyer, Tal Ron, Drihem & Co, Law Firm
Understanding Procurement Fraud by Tommy SeahTommy Seah
Dear Delegates,
Purchasing fraud is on the rise. Companies today do not just face risks from internal fraud but also
from external criminals who are technologically savvy. The important role on combating fraud plays in
minimising financial losses is fast gaining ground. CFE-In-Practice experts is providing you
with practical advice on how to “look for red flags” and symptoms of fraud. Discover
why some numbers do not add up. Mitigate this fraud risk management by learning
the latest strategies that can be adapted to your company. This event will also cover
investigation and prevention, most importantly how to structure your business processes to minimise
the risks whilst maintaining operational efficiency.
Recognising the challenges that organisations are facing in combating Purchasing Fraud, CSI
In Practice is pleased to present this 2-days Workshop on Understanding Procurement Fraud -
Investigation & Resolution. This will serve as an excellent opportunity to learn how best to conduct
an internal investigation to protect your organization and step up on controls to deter fraud.
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
DTC Eligibility & Going Public - Ask Securities Lawyer 101Brenda Hamilton
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Financial Services Authority (FSA) issue Final Notices whenever they have disciplined or censured a firm or individual for whatever reason.
In November 2012 the FSA imposed a £10.5 million fine on Card Protection Plan Limited (CPP) for the mis-selling of insurance products.
Whilst the details are interesting and obviously relevant to the company’s either ignorance or arrogance, the end result was due to a failure of the FSA Principles, a list of 11 time forged values that firms, even today still breach fairly consistently, and always at their cost.
Compliance Officer update: What you should know about your Business Partner -...vivacidade
Compliance Officer update: This presentation shows why and how Compliance questionnaires are used in the context of the Third Party Compliance Due Diligence process. A proposal is made on key data and compliance information that should be obtained from the prospective Business Partner via self-questionnaire. It is the starting point for further analysis and background checks before a contractual obligation is concluded. The due diligence process should be designed to enable the identification of red flags.
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
The Depository Trust and Clearing Corporation (“DTCC”), through its subsidiaries, provides clearing, settlement and information services for securities. DTCC’s subsidiary, the Depository Trust Company (“DTC”) was created to improve efficiencies and reduce risk in the clearance and settlement of securities transactions. Not all securities are eligible to be settled through DTC. DTC Eligibility has become an often unexpected burden for companies in going public transactions.
DTC Eligibility & Going Public - Ask Securities Lawyer 101Brenda Hamilton
Issuers must satisfy the criteria set by DTCC to be settled through DTC. All companies must satisfy this criteria in order to be DTC eligible, including both Securities and Exchange Commission (“SEC”) reporting and non-reporting issuers. DTC eligibility has become a growing concern in going public transactions.
The Financial Services Authority (FSA) issue Final Notices whenever they have disciplined or censured a firm or individual for whatever reason.
In November 2012 the FSA imposed a £10.5 million fine on Card Protection Plan Limited (CPP) for the mis-selling of insurance products.
Whilst the details are interesting and obviously relevant to the company’s either ignorance or arrogance, the end result was due to a failure of the FSA Principles, a list of 11 time forged values that firms, even today still breach fairly consistently, and always at their cost.
Compliance Officer update: What you should know about your Business Partner -...vivacidade
Compliance Officer update: This presentation shows why and how Compliance questionnaires are used in the context of the Third Party Compliance Due Diligence process. A proposal is made on key data and compliance information that should be obtained from the prospective Business Partner via self-questionnaire. It is the starting point for further analysis and background checks before a contractual obligation is concluded. The due diligence process should be designed to enable the identification of red flags.
The deal is complete, and the parties have finished the hard work. Or have they? Integration planning turns to execution as people, process, and technology are combined once the deal is legally closed. The buyer will need to consider the purchased business or assets from the standpoint of employees, IT, customers, suppliers, and a multitude of other areas. In addition, numerous post-closing legal issues may arise, including purchase price adjustments, breaches of representations and warranties, enforcement of key negative employment-related covenants and restrictive covenants, collection of pre-closing accounts receivable, and true-ups of final financials. This episode guides listeners through the process, timing, and issues which most commonly arise after the closing of deals.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/post-closing-issues-integration-potential-buyer-seller-disputes-2021/
The deal is complete, and the parties have finished the hard work. Or have they? Integration planning turns to execution as people, process, and technology are combined once the deal is legally closed. The buyer will need to consider the purchased business or assets from the standpoint of employees, IT, customers, suppliers, and a multitude of other areas. In addition, numerous post-closing legal issues may arise, including purchase price adjustments, breaches of representations and warranties, enforcement of key negative employment-related covenants and restrictive covenants, collection of pre-closing accounts receivable, and true-ups of final financials. This episode guides listeners through the process, timing, and issues which most commonly arise after the closing of deals.
Part of the webinar series:
M&A BOOT CAMP - 2022
See more at https://www.financialpoise.com/webinars/
Learn how you can empower business people in making right decision at right time with business agility that includes both SPEED and ACCURACY……with CONTROL. #BRMSWebinar #BRMS
GDPR: 20 Million Reasons to Get Ready - Part 2: Living ComplianceCloudera, Inc.
Though the majority of organisations will spend plenty of time preparing for GDPR, it’s crucial they consider actually living the regulation. May 2018 is not the end of the need for compliance, it is the beginning. With preparation putting in the foundation for a data subject hub, organisations now need to focus on efficiency in fulfilling the data subject access rights. In this session, we will go into what it means to live GDPR compliance with topics like self service and what it needs to be secure be design.
A Step-by Step Guide to Starting a Nanotech Business
Objective: To build a viable business selling nanotechnology to make profit
How to:
1. Set up your nanotech business structure.
2. Raise financing, receive government grants and tax breaks.
3. Hire developers, employees, subcontractors and suppliers.
4. Protect ownership of your intellectual property in nanotechnology.
5. Use open innovation to enhance R&D.
6. Commercialize your nanotechnology by licensing and distribution.
Navigating Challenges: Mental Health, Legislation, and the Prison System in B...Guillermo Rivera
This conference will delve into the intricate intersections between mental health, legal frameworks, and the prison system in Bolivia. It aims to provide a comprehensive overview of the current challenges faced by mental health professionals working within the legislative and correctional landscapes. Topics of discussion will include the prevalence and impact of mental health issues among the incarcerated population, the effectiveness of existing mental health policies and legislation, and potential reforms to enhance the mental health support system within prisons.
Health Education on prevention of hypertensionRadhika kulvi
Hypertension is a chronic condition of concern due to its role in the causation of coronary heart diseases. Hypertension is a worldwide epidemic and important risk factor for coronary artery disease, stroke and renal diseases. Blood pressure is the force exerted by the blood against the walls of the blood vessels and is sufficient to maintain tissue perfusion during activity and rest. Hypertension is sustained elevation of BP. In adults, HTN exists when systolic blood pressure is equal to or greater than 140mmHg or diastolic BP is equal to or greater than 90mmHg. The
One of the most developed cities of India, the city of Chennai is the capital of Tamilnadu and many people from different parts of India come here to earn their bread and butter. Being a metropolitan, the city is filled with towering building and beaches but the sad part as with almost every Indian city
The Importance of Community Nursing Care.pdfAD Healthcare
NDIS and Community 24/7 Nursing Care is a specific type of support that may be provided under the NDIS for individuals with complex medical needs who require ongoing nursing care in a community setting, such as their home or a supported accommodation facility.
The dimensions of healthcare quality refer to various attributes or aspects that define the standard of healthcare services. These dimensions are used to evaluate, measure, and improve the quality of care provided to patients. A comprehensive understanding of these dimensions ensures that healthcare systems can address various aspects of patient care effectively and holistically. Dimensions of Healthcare Quality and Performance of care include the following; Appropriateness, Availability, Competence, Continuity, Effectiveness, Efficiency, Efficacy, Prevention, Respect and Care, Safety as well as Timeliness.
CRISPR-Cas9, a revolutionary gene-editing tool, holds immense potential to reshape medicine, agriculture, and our understanding of life. But like any powerful tool, it comes with ethical considerations.
Unveiling CRISPR: This naturally occurring bacterial defense system (crRNA & Cas9 protein) fights viruses. Scientists repurposed it for precise gene editing (correction, deletion, insertion) by targeting specific DNA sequences.
The Promise: CRISPR offers exciting possibilities:
Gene Therapy: Correcting genetic diseases like cystic fibrosis.
Agriculture: Engineering crops resistant to pests and harsh environments.
Research: Studying gene function to unlock new knowledge.
The Peril: Ethical concerns demand attention:
Off-target Effects: Unintended DNA edits can have unforeseen consequences.
Eugenics: Misusing CRISPR for designer babies raises social and ethical questions.
Equity: High costs could limit access to this potentially life-saving technology.
The Path Forward: Responsible development is crucial:
International Collaboration: Clear guidelines are needed for research and human trials.
Public Education: Open discussions ensure informed decisions about CRISPR.
Prioritize Safety and Ethics: Safety and ethical principles must be paramount.
CRISPR offers a powerful tool for a better future, but responsible development and addressing ethical concerns are essential. By prioritizing safety, fostering open dialogue, and ensuring equitable access, we can harness CRISPR's power for the benefit of all. (2998 characters)
Deep Leg Vein Thrombosis (DVT): Meaning, Causes, Symptoms, Treatment, and Mor...The Lifesciences Magazine
Deep Leg Vein Thrombosis occurs when a blood clot forms in one or more of the deep veins in the legs. These clots can impede blood flow, leading to severe complications.
Medical Technology Tackles New Health Care Demand - Research Report - March 2...pchutichetpong
M Capital Group (“MCG”) predicts that with, against, despite, and even without the global pandemic, the medical technology (MedTech) industry shows signs of continuous healthy growth, driven by smaller, faster, and cheaper devices, growing demand for home-based applications, technological innovation, strategic acquisitions, investments, and SPAC listings. MCG predicts that this should reflects itself in annual growth of over 6%, well beyond 2028.
According to Chris Mouchabhani, Managing Partner at M Capital Group, “Despite all economic scenarios that one may consider, beyond overall economic shocks, medical technology should remain one of the most promising and robust sectors over the short to medium term and well beyond 2028.”
There is a movement towards home-based care for the elderly, next generation scanning and MRI devices, wearable technology, artificial intelligence incorporation, and online connectivity. Experts also see a focus on predictive, preventive, personalized, participatory, and precision medicine, with rising levels of integration of home care and technological innovation.
The average cost of treatment has been rising across the board, creating additional financial burdens to governments, healthcare providers and insurance companies. According to MCG, cost-per-inpatient-stay in the United States alone rose on average annually by over 13% between 2014 to 2021, leading MedTech to focus research efforts on optimized medical equipment at lower price points, whilst emphasizing portability and ease of use. Namely, 46% of the 1,008 medical technology companies in the 2021 MedTech Innovator (“MTI”) database are focusing on prevention, wellness, detection, or diagnosis, signaling a clear push for preventive care to also tackle costs.
In addition, there has also been a lasting impact on consumer and medical demand for home care, supported by the pandemic. Lockdowns, closure of care facilities, and healthcare systems subjected to capacity pressure, accelerated demand away from traditional inpatient care. Now, outpatient care solutions are driving industry production, with nearly 70% of recent diagnostics start-up companies producing products in areas such as ambulatory clinics, at-home care, and self-administered diagnostics.
2. 2
3 Steps to Successfully Exit
1. Navigate the Due Diligence Process
2. Structure the Payments So You Get Paid
3. Avoid Indemnification Obligations and Having to Give
Back the Cash
3. 3
4 Critical Due Diligence Issues in a Sale Process
1. Ownership Structure
2. Employees and Contractors
3. Regulatory and Compliance Issues
4. IP, IP, IP…..and more IP
4. 4
Ownership Structure
▪ Ownership structure will drive deal structure
▪ Merger necessary if many owners/won’t all sign purchase agreement
▪ Can the buyer get a “basis step up” in the assets that are being acquired?
– Asset acquisition
– Stock acquisition with Section 338(h)(10) election
– Acquisition of partnership of LLC interests
▪ If buyer can get a “basis step up” then more value may be on the table
because the buyer will be able to accelerate depreciation of certain assets
5. 5
Employees and Contractors
▪ IRS focus on employee classification issues
– Sale force classifications present risk
▪ Have all employees and contractors assigned rights to
IP to the company?
6. 6
Regulatory and Compliance Issues
▪ Relationships with referral sources
– Importance of “fair market value”
– Compliance with Physician Payment Sunshine Act
▪ FDA and EMA regulatory authority communications
▪ Adverse event reporting
▪ Reimbursement guidance
▪ Sales and marketing practices
– Off label promotion [See separate breakout session!]
7. 7
IP, IP, IP…..and more IP
Three core questions that Buyers will seek to confirm
during IP due diligence:
1. Do we own it?
2. Can we sell it?
3. Can we protect it?
8. 8
IP, IP, IP…..and more IP
Do we own it?
1. Employees
A. Agreements (obligations to assign; prior obligations)
B. Assignments (executed and recorded; correct inventorship)
2. Consultants
A. NDA (ownership expressly identified)
B. Conflicting obligations (e.g., Universities)
3. Funding (Govt. funding?)
4. Licenses
A. Exclusive/nonexclusive
B. Royalty obligations
9. 9
IP, IP, IP…..and more IP
Can we sell it?
1. Searches (Freedom to operate/market clearance)
Conduct when near commercialized design
2. Written/Verbal communication
Careful treatment of such communication
3. FDA Clearance—510(k)
Predicate device indicates likelihood patents exist to find
4. Design changes
The changes may require updated searches
10. 10
IP, IP, IP…..and more IP
Can we protect it?
1. Patentability inquiry
A. Has searching/examination been conducted or initiated?
B. Linking FDA - commercial product - patent claims
2. Alice Corp. v. CLS Bank decision
Is this the end of software or just a pendulum?
3. Trademarks, Copyrights, and Trade Secrets
How else can we protect?
4. Timeframe
How can we expedite the process?
12. 12
Cash deals in MedTech
▪ Cash is cheap – cheaper for large medtech companies to get debt financing
than it is to pay with equity
▪ A large percentage of medtech exit transactions involve contingent cash:
– Development milestone payment – paid upon achievement of a development
goal (ie, completion of clinical trial)
– Commercial milestone payment – paid upon achievement of a sales goal
– Regulatory milestone payment – paid upon achieving marketing authorization
– Royalty payment – percentage of sales
13. 13
Special thanks to SRS Acquiom for the data
and graphics on the following four slides. To
find out more about SRS Acquiom and their
services as well as the full M&A Life Science
Study, go to: http://srsacquiom.com
14. 14
Earn-out Achievement Rates
40%5%4%51%
Paid Delayed, plan to hit Delayed, plan to miss Missed
41%
10%14%
35%
38%
9%12%
41%
Milestones Come Due – All
128 events – outer circle
$3.7B – inner circle
27 of 56 (48%) deals
with earnouts have
had at least one
payment made.
Actual payments
range widely from 1%
to 100% of contract
amounts.
15. 15
Earn-out Achievement Rates by Industry
40%5%4%51%
Paid Delayed, plan to hit Delayed, plan to miss Missed
36%
11%15%
38%
34%
13%
11%
42%
Biotech Milestones
(55, $2.5B)
45%
8%13%
34% 41%
6%12%
41%
Medtech Milestones
(73, $1.2B)
16. 16
Earn-out Achievement Rates by Stage
40%5%4%51%
Paid Delayed, plan to hit Delayed, plan to miss Missed
37%
13%16%
34% 38%
12%14%
36%
Development Milestones
(77, $2.9B)
48%
5%9%
38%
39%
4%
8%
49%
Commercial Milestones
(51, $800M)
17. 17
Earnout Terms: Diligence Requirements
Note: Because milestones can be subject to more than one diligence requirement*, totals
exceed 100%
* Ex: Commercially Reasonable Efforts for two years after Closing, and Express Buyer Discretion thereafter.
** Ex: Development or marketing plan, specified expenditures, etc.
28%
68%
1%
17% 15% 13%
18%
51%
7%
27%
20%
34%
Specific
Requirements**
Commercially
Reasonable Efforts
Express Good Faith
Efforts
Express No Bad
Faith Actions
No Diligence
Requirement
Express Buyer
Discretion
Developmental/Regulatory Milestones Commercial/Sales Milestones
8% of deals give shareholders a right to buy back
certain assets if the program is halted; most involve
a secondary, rather than the lead, program
18. 18
Outward facing definition
“Commercially Reasonable Efforts” means
the efforts consistent with the past practice
of similarly situated medical device
companies with respect to similarly situated
medical device products.
19. 19
Inward facing definition
“Commercially Reasonable Efforts” means efforts
consistent with the past practice of Buyer
related to research and development, regulatory
approval, commercialization, sales and marketing
of similar medical device products with similar
market potential at a similar stage in its
development.
20. 20
Correlation of Diligence Requirements and Actual Payouts
• According to the SRS Study, almost all of the $1.5B in milestones that have
been paid to date have been associated with a diligence requirement on the
Buyer to use commercially reasonable efforts, or a more specific requirement,
to achieve the milestone.
• In 17 deals with less stringent diligence requirements on the Buyer:
• Three (18%) have seen at least one payment, compared to 48%
across all deals.
• $156M* has been paid out of $536M (29%) in milestones come due to
date, compared to 41% across all deals.
* $100M of this is one product approval from an older deal, when CRE was less commonly negotiated.
If we exclude this milestone, the payment rate drops from 29% to 10%.
21. 21
Keeping the Money – Avoiding Indemnification Liabilities
• Representations and Warranties
• Focus on IP rep
• Indemnification Packages
22. 22
As an Example…. IP Rep for Sellers to Avoid
(a) The Company owns, licenses or otherwise possesses sufficient legal rights to all of the
Company’s material Intellectual Property without any conflict with, or infringement of, the rights of any
other Person. All of the Intellectual Property owned by the Company is owned free and clear of all
Liens.
(b) The patents and patent applications of the Company are valid and enforceable and have
not been challenged, cancelled, expired or abandoned.
(c) No product or service marketed or sold (or currently proposed to be marketed or sold) by
the Company infringes any intellectual property rights of any other party.
(d) There are no outstanding options, licenses, agreements, claims, encumbrances or shared
ownership interests of any kind relating to the Company’s Intellectual Property, nor is the Company
bound by or a party to any options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary
rights and processes of any other Person.
23. 23
As an Example…. Seller-Friendly IP Rep
(a) The Company owns, licenses or otherwise possesses sufficient legal rights to all of the Company’s
material Intellectual Property without any known conflict with, or known infringement of, the rights of any other
Person. To the Knowledge of the Sellers, all of the Intellectual Property owned by the Company is owned free and
clear of all Liens.
(b) To the Knowledge of the Sellers, the patents and patent applications of the Company have not been
challenged, cancelled, expired or abandoned and are valid and enforceable.
(c) To the Sellers’ Knowledge, no product or service marketed or sold (or currently proposed to be
marketed or sold) by the Company violates or will violate any license granted to the Group Companies or infringes any
intellectual property rights of any other party. Other than with respect to commercially available software products
under standard end-user object code license agreements, there are no outstanding options, licenses, agreements,
claims, encumbrances or shared ownership interests of any kind relating to the Company’s Intellectual Property, nor is
the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and
processes of any other Person.
24. 24
Indemnification Packages
• Escrow (how much cash do you get at closing?
• Median escrow size = Approximately 10% of transaction value
• Medial holding period = Approximately 18 months
• Survival Periods for Representations and
Warranties (how long is money at risk?)
• Median survival period = 18 months
• Fundamental representations = statute of limitations
Disclaimer: These terms represent
averages based on review of a variety
of deal summaries available in the
market – each deal is different and
just because a median is reported
does not mean that it is the right fit
for every deal.
25. 25
Indemnification Packages
• Cap (how much is at risk?)
• Median cap = 10%
• Note: wide variation in cap sizes
• Basket (limit on individual claims)
• .5% of transaction value
• Carve-Outs (exceptions to the limitations)
• Fraud, fundamental representations, willful misconduct, tax
Disclaimer: These terms represent
averages based on review of a variety of
deal summaries available in the market –
each deal is different and just because a
median is reported does not mean that it
is the right fit for every deal.
26. 26
About McDermott Will & Emery’s MedTech Transactional Practice
▪ Comprehensive transactional experience that integrates world class
specialized disciplines and leverages our Tier One Health practice:
– M&A, Licensing/Collaboration, Finance, Healthcare Royalty Stream Financing.
– Preeminent Tax, IP, Antitrust, Executive Compensation, Reimbursement, and Regulatory
practices with industry experience.
▪ Global Reach and Savvy:
– Integrated international practice in centers of Life Sciences commerce
– China practice with significant Life Sciences deal expertise and Seoul office serving Korean
company outbound needs.
▪ McDermott Value Proposition:
– Tools and approaches redefining our service delivery.
– Philosophy driven by voice of the customer.
28. 28
Speaker Biography: Krist Werling
Kristian (Krist) Werling is a partner in the law firm of McDermott Will & Emery LLP and is based in the
Firm’s Chicago office. He focuses his practice on representing medical device and pharmaceutical
manufacturers in a wide variety of transactional matters. Concomitant with his practice in the
contemporary landscape of healthcare and life sciences is a related depth of experience in
representing private equity and venture capital investors. In this capacity he works with cross-
disciplinary teams to conduct legal due diligence and execute acquisitions, add-on acquisitions and
divestitures, as well as provide ongoing legal services to portfolio companies. In the healthcare
services space. Krist provides transactional and regulatory counseling to a wide variety of medical
device clients including Baxter International, Varian Medical Systems, C.R. Bard, Amsino International,
Medical Specialties Distributors, Hill-Rom and Breg.
From 2005-2006, Kristian served as in-house counsel to Hospira, Inc., a generic specialty
pharmaceutical and medical device manufacturer in Lake Forest, Ill. He regularly counsels life sciences
clients in transactional and regulatory issues, particularly in negotiating licensing and partnership
agreements, clinical research agreements (including clinical trial and CRO agreements), contract
manufacturing agreements and distribution agreements. Krist currently serves as the Chair of the Life
Science Practice Group of the American Health Lawyers Association. Additionally, Krist co-authored
The Fundamentals of Life Sciences Law: Drugs, Devices, and Biotech, serving as Editor-in-Chief for
the American Health Lawyers Association’s second edition of the publication.
Partner
McDermott Will & Emery LLP
kwerling@mwe.com
+1 312 984 2157
29. 29
Speaker Biography: Todd Hales
M. Todd Hales is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s
Orange County office. He focuses his practice on all aspects of intellectual property (IP) law with a
concentration on strategic intellectual property portfolio management and counseling.
Todd works closely with clients in the development and management of their IP portfolios, helping them
identify and protect key technologies and innovations through careful selection of domestic and foreign
protection and enforcement strategies. He also conducts due diligence investigations in connection
with funding, acquisition and merger transactions, prepares legal opinions on patent validity,
infringement and non-infringement, and handles portfolio and landscape evaluations and pre-litigation
analyses. Todd advises clients on employment agreements and invention ownership, non-disclosure
agreements, assignment and licensing of IP rights, and joint development agreements.
Todd has represented clients in a wide range of technologies. In medical device and life sciences, his
technical experience includes opthalmology, cardiology, urology, gastroenterology, neurology,
pulmonology, radiology and otolaryngology. His experience also includes computer hardware systems,
software systems and architecture, networking technologies, environmental technologies, aerospace,
sports equipment, construction systems and tools, mechanical and electro-mechanical devices and
systems, and optical technologies.
Partner
McDermott Will & Emery LLP
thales@mwe.com
+1 949 757 7126
Does this address product line priorities of a company?
Multiple product lines of Seller:
If a buying company has a different priority for products than the seller, is there an “out” for the buying company to say that Product A is receiving reasonable efforts, but because Product B is not in line with their priorities, they do not have to exert such reasonable efforts?
More middle ground variations:
Material – identify the product line, the intellectual property (i.e., patent applications)
Known infringement of – specify that no known verbal or written assertions to infringement have been made