Add to Calendar 4/9/2019 8:00:00 AM 4/9/2019 10:00:00 AM Cross-Border Biotech Transactions: CFIUS and Other Risks For early-stage research companies seeking equity capital or pursuing strategic alliances with foreign partners or investors, there are considerable risks to consider when conducting these transactions, whether on U.S. soil or in foreign lands. Nonetheless, despite cumbersome impediments, more U.S. biotech and medical device companies are pursuing these alliances or investments, believing that the risks are outweighed by the benefits. Of particular note, in recent years Chinese and other Asian investors have invested record amounts of money into U.S.-based biotechnology firms. Furthermore, the equity investment arms of European Pharma companies are also heavily investing in U.S. biotech companies, as they have accomplished for many years. All of these investment and partnering pursuits are now in trouble, due to recent U.S. government pronouncements, in particular, the new CFIUS proclamations. On November 10 2018, the Committee on Foreign Investment in the United States (“CFIUS”) expanded its regulation of cross-border transactions with several adverse announcements, regulations which may impede the flow of foreign capital into U.S. biotech companies, hinder strategic partnering opportunities, and prohibit acquisitions of U.S. biotech companies -- even if the U.S. company is never leaving the homeland. The life science and biotech industry sectors falls under CFIUS’s list of “27 critical industries” that require expanded – and protracted -- review of foreign investments, strategic partnerships with foreign Pharma partners, and acquisitions involving foreign acquirers. Whether engaging in collaboration arrangements, joint ventures, investments or acquisitions involving foreign players, management of biotech companies need to learn the newest set of roadblocks, snafus and hurdles that they should carefully consider as a consequence of the new CFIUS regulations. MassBio, 300 Technology Square 8th Fl, Cambridge, MA 02139
For early-stage research companies seeking equity capital or pursuing strategic alliances with foreign partners or investors, there are considerable risks to consider when conducting these transactions, whether on U.S. soil or in foreign lands. Nonetheless, despite cumbersome impediments, more U.S. biotech and medical device companies are pursuing these alliances or investments, believing that the risks are outweighed by the benefits. Of particular note, in recent years Chinese and other Asian investors have invested record amounts of money into U.S.-based biotechnology firms. Furthermore, the equity investment arms of European Pharma companies are also heavily investing in U.S. biotech companies, as they have accomplished for many years. All of these investment and partnering pursuits are now in trouble, due to recent U.S. government pronouncements, in particular, the new CFIUS proclamations. On November 10 2018, the Committee on Foreign Investment in the United States (“CFIUS”) expanded its regulation of cross-border transactions with several adverse announcements, regulations which may impede the flow of foreign capital into U.S. biotech companies, hinder strategic partnering opportunities, and prohibit acquisitions of U.S. biotech companies -- even if the U.S. company is never leaving the homeland. The life science and biotech industry sectors falls under CFIUS’s list of “27 critical industries” that require expanded – and protracted -- review of foreign investments, strategic partnerships with foreign Pharma partners, and acquisitions involving foreign acquirers. Whether engaging in collaboration arrangements, joint ventures, investments or acquisitions involving foreign players, management of biotech companies need to learn the newest set of roadblocks, snafus and hurdles that they should carefully consider as a consequence of the new CFIUS regulations.
Head of Healthcare Corporate Finance and East/Central Life Science, Silicon Valley Bank
Katherine Andersen is a senior market manager covering Healthcare Corporate Finance in the U.S. in addition to the East and Central regions for SVB’s national Life Science practice. She also sits on the Board of Directors for SVB's China Joint Venture. Prior to SVB, Katherine was a Senior Vice President for Wells Fargo Bank leading the Life Sciences business development and relationship management efforts for the New England region. Before that, she was a Director at Wells Fargo Capital Finance focused on front-end business development and underwriting of structured loans, ultimately totaling over $3.0B in commitments. Prior to Wells, she held various positions across mergers and acquisitions, finance, equity derivatives, audit, and management while at Affiliated Managers Group, Merrill Lynch, GE Corporate Audit Staff and GE Capital. Katherine has a bachelor’s degree in finance and economics from Virginia Tech. She has also completed Dartmouth’s Tuck Executive Leadership and Strategic Impact Program, Wells Fargo’s Transformational Leadership Program, the Program on Negotiation at Harvard Law School and the GE Capital Financial Management Program. Away from work, Katherine serves on the Finance Advisory Board for Virginia Tech, the Advisory Board for the WEST Organization, and Chairs the Corporate Council for the American Cancer Society’s AstraZeneca Hope Lodge.