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Faber Principal Points to the Unique Traits of Gene Therapy Deals
In fall 2016, Robert A. Aboud, a principal with Faber Daeufer & Itrato who leads the firm’s Philadelphia office, spoke about the unique traits and challenges of gene therapy and cell-based therapy deals at CBI’s Life Sciences Summit on M&A and Strategic Alliances in Cambridge, Massachusetts.
In “Gene Therapy Deals: Case Studies and Lessons Learned,” Rob shared insights and strategies for addressing the complex issues associated with such deals in order to drive commercialization while capturing adequate revenue from the intellectual property. In particular, he examined the legal and business issues surrounding what he termed the “patchwork IP” of key program assets throughout the deal’s life cycle. He also highlighted special considerations related to the “blurry line” between the IP for platform technology and the actual therapeutic product. And he discussed the challenges for ensuring consistent manufacturing supply and clinical trial support without undue reliance upon, and financial obligations to, university investigators, tech transfer offices and to third party IP holders.
“In gene therapy and cell-based therapy deals, the IP protection is often based only on method of treatment claims or regulatory exclusivity,” explains Rob. “It may also require the stacking of composition-of-matter IP from several sources to come up with the ultimate product IP coverage. In such cases, the total royalty stack and the continued use/access rights of third parties can be very challenging to successful commercialization. Because academic labs are often involved in the key development of these products, there’s the potential for biotech firms to become heavily reliant upon an academic center for getting a product to market.”
Rob focused his talk on four deals that he has handled while at Faber or through his prior inhouse practice at GlaxoSmithKline. Each example highlighted different challenges unique to these transactions.
The Annapurna Tx/Cornell University case study described a deal based mainly on method-of-treatment IP that eventually led to an acquisition and formation of a new entity, AdverumBio. The overall deal involved initial product supply from the academic vector manufacturing core, which is not uncommon for these types of gene therapy deals.
The WaVe LifeSciences/Pfizer case study dealt with an option-based, multi-program oligonucleotide drug discovery and development deal involving various types of platform IP in relation to the IP covering the actual therapeutic product This IP overlap is common with nucleic acid therapeutics deals, and can present unique challenges when negotiating research and discovery collaborations.
The GlaxoSmithKline/TIGET/Telethon Foundation, Italy case study examined the complexity of a three-way partnership involving a commercial entity, a research hospital and a nonprofit foundation. It involved a multi-program option deal focused on ultra-rare diseases. Challenges included: (1) structuring and enforcing a three-party arrangement based on IP claims for method of treatment; and (2) necessarily small data sets pointing to “stunning” clinical efficacy.
The Lonza/Massachusetts Eye & Ear Institute (MEEI) case study covered an exclusive license arrangement that included a novel “co-brokering” deal structure that permitted exclusive sublicensing by Lonza for certain fields and retained rights for MEEI in other fields. The challenge was how to protect MEEI’s interests in further developing and broadly licensing the vector technology, while optimizing commercialization and avoiding commoditization of the novel vector IP.
“Because these gene therapy and cell-based therapy deals present such unique challenges, they’re best handled by attorneys who are familiar with the ins and outs,” comments Rob. “Given our biotech focus and our deep practice in gene therapy and cell-based therapy here at Faber, we’ve negotiated such deals many times over the past decade. In this niche, biotech companies need legal counsel who have walked this walk to a successful outcome before.”
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