On 23 January 2025, we hosted the 2025 edition of the Covington European Life Sciences Symposium. The Symposium brought together colleagues from London, Brussels, Frankfurt and Dublin with our industry connections to explore the evolving challenges and opportunities facing the European life sciences sector.
Throughout the day our speakers shared their perspectives on a range of legal, regulatory, and business trends, including the evolving regulatory frameworks in the EU and UK; information exchange in ongoing collaboration; investigations and whistleblowing; key ESG topics, and the complexity of options to acquire in pharma deals.
We have set out some of the discussion from the sessions below.
European Life Sciences – The Changing Landscape for Pharma and Biotech
Grant Castle, Head of Covington’s European Life Sciences Regulatory Practice, Peter Bogaert, Marie Doyle-Rossie and Anna Wawrzyniak kicked off with a discussion about the Changing Landscape for Pharma and Biotech.
The UK and EU both aim to deliver access to innovative and transformative medicines and foster international competitiveness in the life sciences industry. Despite the practical challenges faced by the UK Medicines and Healthcare products Regulatory Agency (MHRA) in recent years, it has emerged as an ambitious regulator and is establishing innovative regulatory frameworks, including an international reliance scheme (see our update here), point of care manufacturing regulations, and the relaunch of the Innovative Licensing and Access Pathway (ILAP).
The EU is also pursuing a wave of legislative reform, including wide ranging revisions to the EU’s pharmaceutical legislation, the EU’s supplementary protection certificates (SPC) rules, and proposals for a compulsory licensing scheme.
There can sometimes be a tension between the UK’s and EU’s aims and the practical impacts of regulatory reform, especially in the early stages of implementation.
The EU HTA Regulation
This tension was evident in Adem Koyuncu’s and Raj Gathani’s overview of the EU HTA Regulation: Practical and Legal Points for 2025 & Beyond. From this year, the EU HTAR will introduce a Joint Clinical Assessment (JCA), a form of health technology assessment focused on relative clinical effectiveness against one or more selected comparators, for new medicines subject to an application for an EU centralised marketing authorisation. JCAs are designed to facilitate market access for medicines by supporting Member State evaluation of medicines for pricing and reimbursement.
Adem and Raj discussed how JCAs are likely to be resource-intensive for companies with compressed timelines. Further, it is not clear if the EU has enough assessors or resources; the Annual Work Programme 2025 predicts that 25 JCAs will be initiated, but only 10 joint scientific consultations (JSCs), which enable companies to obtain scientific advice on the data requirements for each JCA process, will be offered.
It remains unclear what impact the JCA process will have on Member States, who must give JCAs “due consideration”, and whether the company can challenge an unfavourable JCA.
Companion Diagnostics under the IVDR
A more established regulatory framework that poses ongoing challenges for the EU’s aim to deliver innovative and personalised medicine, and compete for a share of commercial clinical trials, is the EU’s In-vitro Diagnostic Medical Devices Regulation (IVDR).
In Sarah Cowlishaw and Roderick Dirkzwager’s talk on Companion Diagnostic Development, Sarah outlined how, since the introduction of the IVDR in 2022, companion diagnostic (CDx) devices have been subject to higher pre-market regulatory requirements, such as increased Notified Body involvement and drug authority consultation.
Roderick observed how the lack of alignment between the IVDR and Clinical Trial Regulation can create unique regulatory challenges (and delays) for the use of CDx devices in EU drug clinical trials. A recent report by IQVIA for EFPIA and Vaccines Europe suggests that since 2018 the IVDR may have contributed to a 22% reduction in oncology trials and a 42% reduction in neurology trials in the EEA.
Sarah and Roderick concluded by exploring how parallel requirements under pre- and post- market drug and device regulations raise unique challenges for CDx device collaborations, such as which partner is responsible for regulatory compliance of CDx performance studies.
Efforts Clauses
In life sciences collaborations, commercial partners may negotiate the delegation of responsibility by using “efforts clauses” to qualify their obligations.
Jonathan Gimblett and Monique O’Donoghue, from our International Arbitration and Disputes practice, presented on this topic: Efforts Clauses in Life Sciences Contracts. They explained how the interpretation of efforts clauses, from “commercially reasonable efforts” to “best efforts” (“endeavours” for those in the UK), varies by jurisdiction.
Uncertainty in interpreting efforts obligations and the risk of dispute can be reduced by expressly stating in the contract the steps the obligor should take to achieve the relevant objective, and by considering factors such as cost and time expenditure. Comparative standards for effort (e.g., similarly situated pharma companies) can also reduce uncertainty, and, in the event of a dispute, may enable an expert to comment on industry standards.
Environmental, Social and Data Laws
In the opening panel, Grant Castle discussed how it is now, more than ever, important to look beyond pharma laws at environmental, social and data laws.
To that end, Grant, Mark Young and Paul Maynard provided an update on the EU’s NIS2 Directive: Complying with NIS2 and Update on National Laws. NIS2 imposes new security and governance requirements and short incident reporting windows. Companies will need to consider the intersection of NIS2 with existing rules related to data integrity and security under sector-specific rules.
Colleagues also presented on ESG – Key Topics for Life Sciences Companies. Cándido García Molyneux discussed the significant financial impact the EU’s new Urban Wastewater Treatment Directive (UWWTD) will have on producers of pharmaceutical (and cosmetic) products. The UWWTD requires producers to pay 80% of the cost (capital and operational) of quaternary treatment to remove micropollutants from wastewater.
Another emerging financial and compliance burden for pharmaceutical companies, considered by Bart Van Vooren, is the stacking of global and national access and benefit-sharing obligations, which require companies to disclose their use of non-human biological materials and digital sequence information, and pay “taxes” for using such information.
Seán Finan provided some practical examples of how pharmaceutical companies making green claims should take care to comply with both the general rules on green claims and greenwashing (the EU’s Greenwashing Directive and Green Claims Directive), and the specific rules on advertising and communicating for the pharmaceutical industry.
Options to Acquire
A multidisciplinary panel hosted by James Halstead on an innovative exit strategy, Options to Acquire, concluded the Symposium.
Under an option to acquire structure the pharma partner is granted a right to acquire the whole of a smaller target company or part of that company’s portfolio, typically alongside a funded collaboration. The parties pre-agree the exit terms (including price), locking-in the target’s asset(s) and determining the target’s strategic focus.
Winsome Cheung and Ben Land-Maycock discussed how this structure is best suited to early-stage single asset transactions where pricing can be more readily agreed.
It is often many months (indeed, years) before the option is exercised, which, as Inga Pietsch explained, requires deal terms to be flexible enough to accommodate an evolving asset and intellectual property portfolio. Bethan Lukey described how the time between the initial investment and the option being exercised can also create complexity for merger control.
Guy Dingley provided an overview of key tax considerations, including the treatment of the option fee, R&D tax relief and shareholder EIS relief.
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We would like to thank our industry connections for attending the Symposium, and look forward to hosting similar events in the future.
If you would like to discuss the latest European life sciences developments and what they may mean for your company’s operations, please feel free to reach out to our specialist UK and EU teams or the speakers.