Pharmaceutical products from China continue to be subject to the fentanyl-related emergency tariffs (20%) and are expected to be subject to national security tariffs to be announced under Section 232 of the Trade Expansion Act of 1962, despite the recently announced “exemption” from the so-called “reciprocal tariffs” announced on April 2, 2025. We expect the Section 232 investigation to move quickly, and we advise companies to take prompt proactive steps to assess the tariff impacts. Our trade team stands ready to assist clients in navigating the fast-developing tariff landscape.
Trends and Insights
FDA’s Roadmap to Reducing Preclinical Animal Safety Studies: Six Things to Know
On April 10, 2025, the U.S. Food and Drug Administration (FDA) announced a new initiative to explore ways to reduce preclinical animal safety studies for human drugs and biological products, beginning with an approach to allowing the use of “New Approach Methodologies” (NAMs) in lieu of animal testing for eligible investigational monoclonal antibodies.[1] The agency’s plan marks a significant departure from decades of agency practice, in which life sciences companies developing novel therapeutic products typically have conducted a number of safety studies, including pharmacological and toxicological studies, in various species before progressing to the clinical phase. Below are six key points for life sciences companies to know about FDA’s plans to incorporate NAMs into preclinical evaluations for human drugs and biologics.
Royalty Report: Royalty Finance Transactions in the Life Sciences 2020-2024
This Royalty Report provides an analysis of publicly reported royalty finance transactions for the last five years (2020 to 2024) in the life sciences sector, focusing on both traditional and synthetic royalty transactions. Traditional royalty transactions encompass monetizations of royalties under existing license agreements. Synthetic royalty transactions involve the sale of a portion of future product sales, rather than the sale of an existing future royalty entitlement.
Opening the Window for S-3 Effectiveness Post-10-K Filing
It’s a tale as old as time for many small- and mid-cap biotech companies…you file a new Form S-3 shelf registration statement in connection with your Form 10-K filing in late February or March and are eager to do a shelf takedown after some promising investor meetings. The SEC confirms that it is not reviewing the Form S-3 and you are able to go effective, but wait! As a non-WKSI, you must have your proxy information on file (either through Part III of your Form 10-K or by filing your proxy within 120 days of year end) in order to take your Form S-3 effective and begin using the shelf. Companies have historically had three choices to resolve this dilemma: (i) quickly pull together a Form 10-K/A to include Part III information in the Form 10-K filing, (ii) accelerate the proxy filing timing or (iii) wait until the proxy is on file. Options (i) and (ii) will put unwanted pressure on the legal and finance teams and under option (iii) each passing day could mean the difference between an equity raise and losing interested investors.
Key Takeaways: Life Sciences 2025 Outlook: Capital Markets Webcast (March 19)
Melanie Neary, Branden Berns, and Ryan Murr of Gibson Dunn, along with Bud O’Hara of Jefferies, hosted a Life Sciences 2025 Outlook: Capital Markets webcast on Wednesday, March 19, 2025, breaking down capital market trends, deal activity, and industry expectations for life sciences in 2025.
Introducing the Royalty Finance Tracker
Dear friends and colleagues,
We are excited to introduce the Gibson Dunn Royalty Finance Tracker (https://www.gibsondunn.com/royalty-finance-tracker/) in conjunction with the launch of Biotech Briefings, where we have compiled all publicly announced royalty finance transactions amongst the most active funds that have occurred since January 1, 2020.
Key Takeaways: Life Sciences 2025 Outlook: Royalty Finance Webcast (March 12)
Todd Trattner and Ryan Murr of Gibson Dunn and Doug Prescott of TD Cowen hosted a Life Sciences 2025 Outlook: Royalty Finance webcast on Wednesday, March 12, in which they provided an integrated outlook on royalty finance in the life sciences industry, identifying trends and uncertainties that will shape the year ahead.
SEC Expands Confidential Submission for Form S-1 Filings: New Rules Enhance Fundraising Options for Life Sciences Companies
The Securities and Exchange Commission (SEC) has expanded confidential submission privileges for Form S-1 filings, benefiting many life sciences companies. As of March 3, 2025, public companies, including those that became public through reverse mergers and those subject to “baby shelf” limitations, can now submit draft registration statements for confidential review.
Join us: Life Sciences 2025 Outlook: Capital Markets Webcast (March 19)
You’re invited! Please join Ryan Murr, Branden Berns and Melanie Neary of Gibson Dunn and Bud O’Hara of Jefferies for a Life Sciences 2025 Outlook: Capital Markets webcast on Wednesday, March 19 from 1 – 1:45 pm ET / 10 – 10:45 am PT. We will provide an integrated outlook on capital markets in the life sciences industry, identifying trends and uncertainties that will shape the year ahead.
The Latest Pay-to-Play Non-Circumvention Provisions in the NVCA Model Documents and Considerations for Private Biotech Companies
The National Venture Capital Association (NVCA) recently updated its model equity financing documents to reflect changes in law and market norms. One update particularly relevant in the life sciences context is the temporary suspension of a preferred stockholder’s right to convert its preferred stock into common stock during the period prior to completion of a financing round with a “pay-to-play” component (see Section 4.1.1 of the model Certificate of Incorporation available here and excerpted below).