Biotech Briefings

Is There a Duty to Disclose FDA Feedback?

| Posted by Ryan A. Murr; Branden C. Berns; Melanie E. Neary; Topic(s): FDA

The Trustees of Welfare & Pension Funds of Local 464A – Pension Fund v. Medtronic PLC, 726 F. Supp. 3d 938 (D. Minn. 2024).

Case Highlights

On March 28, 2024, a federal district court held that positive statements about the prospect of U.S. Food and Drug Administration (FDA) approval of a company’s latest product were not sufficiently alleged to be false or misleading even though the company did not disclose that it had received a Form 483—a form issued by the FDA following an inspection that lists objectionable conditions an investigator believes violate the Food, Drug, and Cosmetic Act and other related acts.

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National Venture Capital Association Addresses “Shadow Trading” Concerns Summer Updates to Form of CDA and Model PIPE Documents

| Posted by Ryan A. Murr; Branden C. Berns; Jessica Valenzuela; Jina L. Choi; Melanie E. Neary; Topic(s): ECVC; Trends and Insights

The National Venture Capital Association (NVCA) has continued its commitment to standardizing venture financing documents by incorporating new language into its form confidential disclosure agreement (CDA) aimed at addressing the emerging “shadow trading” issue in light of the SEC v. Panuwat case. This update should help to standardize shadow trading carveouts in CDAs, which have initially varied in their adoption and have sometimes been met with resistance by counterparties based on a misunderstanding of the Panuwat holding.

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Potential Impacts of Most-Favored-Nation Executive Order on Ex-US License Agreements

| Posted by Ryan A. Murr; Branden C. Berns; Melanie E. Neary; Topic(s): FDA; Government Regulation; License Agreements; Trends and Insights

Introduction

On May 12, 2025, President Donald Trump signed an Executive Order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”. This order aims to address the perceived imbalance where the United States funds a significant portion of global pharmaceutical profits and pays high prices, while drug manufacturers offer deep discounts to access foreign markets, subsidizing those lower prices through higher prices in the United States. The stated purpose of the Executive Order is to ensure that Americans are not forced to pay almost three times more for the same medicines and have access to the most-favored-nation (MFN) price.

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Trump Administration Revives Possibility of MFN Drug Pricing: Key Implications for the Life Sciences Industry

| Posted by Rachel E. Baron; Wynne Leahy; Carlo Felizardo; Jonathan M. Phillips; John D.W. Partridge; Katlin McKelvie; Topic(s): FDA; Government Regulation; Trends and Insights

On May 12, 2025, President Trump signed an Executive Order (“EO” or “Order”) “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” aimed at significantly reducing U.S. prescription drug prices by aligning them with the lowest prices paid by other developed nations.  According to the EO, drug manufacturers “deeply discount their products to access foreign markets and subsidize that decrease through enormously high prices in the United States.”  Seeking to rectify this “egregious imbalance,” the EO announced the following policy: “Americans must therefore have access to the most-favored-nation price for these products… [and] should drug manufacturers fail to offer American consumers the most-favored-nation lowest price, [the] Administration will take additional aggressive action.”

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Gibson Dunn and BCLT Host a Webcast Series on Royalty Finance, the UCC, and Issues of Recharacterization

| Posted by Todd J. Trattner; Ryan A. Murr; Topic(s): Royalty Finance

Gibson Dunn has partnered with the UC Berkeley Center for Law & Technology on a three-part webcast series that discusses issues originally raised in a Law 360 article on royalty financing written by partners Todd Trattner and Ryan Murr.

In the series, partners Todd Trattner, Ryan Murr, Jin Hee Kim, and Jeffrey Krause and associates Kali Jelen, Anthony Hajj, and Michael Farag provide an in-depth exploration of royalty finance, the treatment of synthetics under the UCC, and the risks of a sale of a synthetic royalty being recharacterized as a loan in bankruptcy.

The series is designed to educate biotechnology stakeholders (investors, entrepreneurs, companies, and their attorneys) on best practices for monetizing and investing in a synthetic royalty so that they can embark on such transactions with greater certainty.

To access the series, visit:

You can watch the series for free using the code “BCLT-GD” at checkout.

“Deal Lawyers Download” Podcast: Shell Companies and Reverse Mergers

| Posted by Ryan A. Murr; Branden C. Berns; James J. Moloney; Topic(s): Reverse Mergers

Listen to Ryan Murr, Branden Berns, and James Moloney discuss reverse mergers and how recent actions by the SEC have influenced the ways that reverse mergers are structured and the implications of those actions for those companies considering a reverse merger on the “Deal Lawyers Download” podcast produced by DealLawyers.com.

Listen here (subscription required).

Missed PDUFA Targets: Context, Concerns, and the Case of Stealth BioTherapeutics

| Posted by Branden C. Berns; Katlin McKelvie; Carlo Felizardo; Topic(s): FDA

The FDA’s commitment to timely drug approvals under the Prescription Drug User Fee Act (PDUFA) has been a cornerstone of its regulatory framework. Historically, the agency has maintained a high success rate in meeting its PDUFA goals; however, a handful of delays will typically occur each year for largely idiosyncratic reasons. Since 2021, when the FDA experienced delays due to challenges during the COVID-19 pandemic, the FDA has generally met or exceeded 90% of its review performance goals for new drug applications (NDAs) and biologics license applications (BLAs). However, recent regulatory upheaval at the FDA has prompted discussions of a potential decline in the previously reliable response rates and the implications for biotech companies and patients awaiting new therapies.​

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Impact of Current and Proposed Tariffs on Pharmaceutical Products

| Posted by Adam M. Smith; Samantha Sewall; Hui Fang; Topic(s): International Trade; Trends and Insights

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.

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FDA’s Roadmap to Reducing Preclinical Animal Safety Studies: Six Things to Know

| Posted by Katlin McKelvie; Carlo Felizardo; Topic(s): FDA; FDA Guidance; Trends and Insights

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.

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