Insights

Innovative Insights: Legal Updates in Life Sciences | First Quarter 2025

April 02, 2025 Newsletters

ISSUES AND UPDATES

Blurring the Line Between the Dry and Wet Lab: Joint Inventorship in AI-Assisted Life Science Inventions

Artificial intelligence is revolutionizing life science R&D (particularly in the realm of drug discovery) and challenging the traditional "human inventorship" requirement for U.S. patents. Recent guidance from the USPTO clarifies that a substantial human contribution is required for AI-assisted inventions to be eligible for patent protection. This article explores the implications, highlighting the need for proactive inventorship inquiries to navigate the complexities of AI-driven innovation.
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Constitutional Challenges to Inflation Reduction Act Head to Courts of Appeals

Multiple pharmaceutical manufacturers have challenged the Inflation Reduction Act's so-called Drug Price Negotiation Program, alleging constitutional and Administrative Procedure Act violations. As appellate courts prepare to rule, these cases could reshape Medicare's pricing power and the government's ability to impose conditions on federal spending programs, with potential Supreme Court involvement looming.
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State Attorneys General Increasing Oversight and Focus on Private Equity in Health Care Industry

State attorneys general are ramping up oversight of private equity investments in health care, with new legislation across several states creating a greater role for AGs to review, and in some cases approve, such investments. Several other states have proposed legislation to further strengthen existing "corporate practice of medicine" prohibitions limiting control and direction of various activities, including non-clinical functions, by entities not owned or controlled by licensed health providers (forestalling traditional PE-backed structures).
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EU Markets Become More Accessible to Small and Medium-Sized Enterprises Thanks to Changes to the EU Prospectus Regulation: A Welcome Development for Companies Active in the Medical Sector

The EU Listing Act introduces significant changes to the EU Prospectus Regulation, easing market access for small and medium-sized enterprises, including biotech and med-tech. Key updates include higher dilution thresholds, new exemptions, simplified prospectus requirements, and improved IPO conditions, enhancing funding opportunities and reducing administrative burdens.
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Earnouts in M&A Transactions: Recent Decisions From Delaware

In 2024, Delaware courts issued multiple instructive decisions on earnout provisions in life sciences M&A transactions. These decisions highlight the importance of drafting clear and precise earnout provisions in M&A transactions, assessing whether a party can consider its own self-interest in satisfying any commercially reasonable efforts or similar obligation, maintaining clear and thorough records supporting actions taken with respect to programs subject to earnouts, and proactively considering how dispute resolution procedures and fee-shifting provisions in transaction documents may impact post-closing disputes.
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EXECUTIVE ORDERS AND POLICY UPDATES

Since President Trump's inauguration, the Trump administration has issued a number of executive orders and policy actions with potential impacts for the life sciences industry. Notable actions include rescinding Biden-era initiatives on health care access and equity, withdrawing from the World Health Organization, reducing indirect costs for NIH grants, and suspending foreign aid.
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RELEVANT RESOURCES

NEWSWORTHY

LAWYER SPOTLIGHT

Ted Powers

Ted Powers, partner in Jones Day's New York Office, represents private equity and other sponsors, acquirers, targets, and financial advisors in multibillion dollar global mergers and acquisitions, divestitures, equity and debt investments, and joint ventures. He also advises management and boards of directors on strategic and governance matters. Ted's practice spans multiple industries, including technology, life sciences, energy, financial services, and industrials. Click here to watch as Ted explains more about his practice.

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Innovative Insights: Legal Updates in Life Sciences | First Quarter 2025

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