Life Sciences Restructurings Hit Massachusetts as Patent Cliffs, M&A Deals Reshape Workforce (Boston Business Journal)
Lately, there seems to be one word on the lips of some of the largest life sciences and medical device employers in Massachusetts: restructuring. “It’s in the natural life cycle of the industry to have cliffs that follow on from periods of extraordinary productivity and blockbuster drug approvals, and how those cliffs impact the industry may depend a lot on what the other dynamics are at the time that that occurs,” said Molly Grammel, partner in Goodwin’s Intellectual Property Litigation practice and member of the firm’s Life Sciences disputes group. Grammel said today’s market dynamics make it much less likely that companies will be able to absorb the impact of a loss of market exclusivity for blockbuster drugs with price increases. Some of those factors include the Inflation Reduction Act and the increased cost of R&D for more complex products. In pharma, Grammel said, the main way companies look to fill a gap is by replacing a blockbuster with another blockbuster through R&D investment and M&A. For example, GSK has said it’s going to reinvest cost savings into aggressive, late-stage R&D. Grammel described this as a “proactive restructuring” for an upcoming expected loss of exclusivity. “The cliff had happened, and there has been the belt tightening because the revenues are not there to replace what was lost when the exclusivity expired.”
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