Abstract
D&MD' s Guide to Due Diligence in Life Science Transactions, 2nd Edition
provides a comprehensive overview on due diligence and a proven path to
success for professionals working in the life sciences industry. This guide
includes summaries of key investigation areas and critical questions to ask
during the due diligence process. Also included are checklist tools readily
employable in day-to-day business operations.
Table of Contents
Chapter 1: Executive Summary
Chapter 2: Introduction
- What is Due Diligence?
- How to Use this Guide
Chapter 3: Due Diligence and Life Science Businesses
- The Role of Due Diligence in Life Science Transactions
- Goals for Due Diligence
- The Due Diligence Process
- External Parties that can be Tapped for Expertise as Needed
- Examples of Due Diligence in the Life Sciences
- Important, Common Traps to Avoid
- Not Enough Expertise on the Team
- Lack of Coordination
- Inadequate Confidentiality Coverage
- Too Specific/Too General a Request for Information
- Relying Entirely on Seller-provided Information
Chapter 4: Investigation Areas
- Corporate Information
- Corporate Information Summary
- Corporate Information Questions
- Transaction Rational
- Company Structure and Founders
- Management / Shareholder Relations
- Business Vision
- Investor Composition and Relations
- Equity Structure
- Subsidiaries and Affiliates
- Stock Restrictions
- Corporate Information Checklist
- Financials
- Financials Summary
- Financials Questions
- Financial Statements
- Accounting Issues
- Profitability and Expenses
- Burn Rate and Funding
- Extraordinary Financial Events
- Liabilities and Debt
- Taxes
- Financials Checklist
- Products and Market
- Products and Market Summary
- Products and Market Questions
- Current Products
- Customer Satisfaction
- Data on Marketed Products
- Competition
- Marketing Strategy
- Sales Techniques and Channels
- Products and Market Checklist
- Research and Development
- Research and Development Summary
- Research and Development Questions
- Group Structure and Talent
- R&D Strategy
- Product Development
- R&D Technologies
- Bioinformatics
- IP and Publications
- Research and Development Checklist
- Intellectual Property
- Intellectual Property Summary
- Intellectual Property Questions
- Patents and Ownership
- Freedom to Operate and Infringement
- Patent Coverage
- Trade Secrets
- Copyrights
- IP Processes
- Third-Party Agreements
- Intellectual Property Checklist
- Operations 4-14
- Operations Summary
- Operations Questions
- Suppliers
- Manufacturing
- Distribution
- Information Technology
- Asset Valuations
- Operations Checklist
- Legal and Corporate Issues
- Legal and Corporate Issues Summary
- Legal and Corporate Issues Questions
- Corporate Minutes
- Stock Purchase Records
- Contracts
- Ownership of Assets
- Litigation
- Permits
- Conflicting terms
- Antitrust
- Legal and Corporate Issues Checklist
- Human Resources
- Human Resources Summary
- Human Resources Questions
- Organizational Structure
- Executive Background
- Executive Teamwork
- Executive Compensation
- Employees
- Human Resources Checklist
Chapter 5: Independent Investigation
- Creative Sources of Information
- Primary Sources of Information
- Internal Primary Information
- External Primary Information
- Secondary Sources of Information
- World Wide Web Precaution
- Secondary Source Listing
- Company Background
- General Databases
- Financial Information
- Management Information
- Life Sciences Industry
Chapter 6: Conclusion
Chapter 7: Appendices
- Example Confidential Disclosure Agreement
- Example Request for Information (RFI)
- SWOT Analysis
- Strengths
- Weaknesses
- Opportunities
- Threats
- Example Memorializing Memo
- Example Due Diligence Report Executive Summary
TABLE OF EXHIBITS
- Exhibit 3.1 Life Science Transactions Requiring Due Diligence
- Exhibit 3.2 Venture Capital Investments in Various Sectors of the Life
Sciences Space
- Exhibit 3.3 M&A Activity in Terms of Number of Transactions and Amount Paid
- Exhibit 3.4 Due Diligence Steps for a Buyer
- Exhibit 3.5 Top 10 Due Diligence Flags for Venture Capitalists
- Exhibit 3.6 You Can' t Know Everything
- Exhibit 3.7 Due Diligence Issues in Select Recent Life Science Deals
- Exhibit 3.8 Beware Royalty Stacking
- Exhibit 5.1 Tips for Conducting Primary Interviews
- Exhibit 6.1 Possible Results of Due Diligence
- Exhibit 7.1 Example SWOT Analysis of a Hypothetical Company
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