Print this article
 View as PDF
Send us your comments

John Pennett

The world has become a smaller place. There is not a day that goes by when businesses do not feel the effects of the global economy. Concerns over fuel prices, capital markets liquidity, sourcing of products overseas, and value of the dollar impact all of us. And, we all know the capital markets have been very difficult in this economy, and companies have been seeking financing wherever available.

All of this means that domestic companies have to look globally for financing, sourcing of goods and services, and for potential collaboration partners and customers. The life science industry is no exception to this rule.

Certainly many of our local companies in both the public and private sectors have accessed overseas venture capital and PIPE financing. The relatively weak dollar has some impact, but there are still funds sitting on the sidelines waiting for perceived good investments — but of course at favorable valuations to the investors. We have also seen many companies list their company on overseas exchanges — perceived as another source of liquidity and at a lower cost of compliance (i.e. no Sarbanes-Oxley) — the AIM exchange and other foreign exchanges have been more aggressive in recruiting potential registrants. Although the time and cost in dealing with foreign investors and listing is significant, they are viable sources of potential funding and liquidity that must be considered in these difficult economic times.

There have been several major staff reductions recently announced by both big pharmaceutical companies and biotechs. The difficult funding environment, concerns over blockbuster drugs coming off patent and the uncertain regulatory environment (both approval and pricing) have caused companies to seek impactful progress to their programs with overseas partners. Overseas CRO s, manufacturers, marketing support organizations and even infrastructure support organizations provide a viable alternative to source critical functions. Certain companies are finding that foreignbased collaboration partners are aggressively seeking new products and opportunities, and the U.S. marketplaces are still considered the most innovative. And, foreign-based life science companies still desperately seek to have their products sold in the U.S. markets.

This issue of Catalyst focuses on some of the key implications of life science companies doing business in the global marketplace, and specifically on the cultural and managerial challenges to doing business abroad. We also feature BioPortUS A, an organization (and we are proud to be one of the founding participants) of leading experts in the life sciences field, designed to help foreign companies establish the pathway to success as they enter the U.S. marketplace. We also explore some of the listing opportunities and challenges with the AIM exchange, and the implications of the convergence of accounting standards on a global basis to International Financial Reporting Standards (IFRS).

Think big. Think global. We hope you enjoy.

John Pennett, Officer-in-Charge Life Sciences Practice
Amper, Politziner & Mattia, LLP