Case study:
For-Cause Due Diligence: Assessing Technical Disclosure in a Medical Device Acquisition
Background:
The Client: A UK-based wholly owned subsidiary of a Biopharmaceutical company headquartered in APAC
The Target: The senior management team of a European-based medical device company acquired by the Client several years earlier
The Project: To undertake for-cause due diligence concerning the extent of technical disclosure regarding a medical device it had acquired, at the time of the transaction
Boyds approach
Our client requested that the Boyds team undertook a deep dive into the stage of development of and technical performance data for a medical device at the time our client was conducting its own due diligence prior to a transaction resulting in the acquisition of the device manufacturer. To this end, the Boyds team was provided with access to a Data room containing all the technical data and management presentations available to our client in the lead up to the acquisition. As part of this exercise, a Q&A log was maintained, which was used to track technical questions forwarded to and answered by the senior R&D leadership team responsible for the development of the device at the time of the transaction.
The Boyds team prepared a red flag report for the client detailing what summary information had been provided to our client, in comparison with the status of the development of the device as determined by our examination of the available data. Our conclusions were that: (i) technical issues with the device and (ii) critical delays in the manufacturing schedule and therefore, finalization of the device specification, that would affect ANDA submission had not been disclosed during diligence by our client. In fact, the target company’s timelines showed the project as still being on track, instead of up to 13 months behind schedule.
Impact and Outcomes
The Boyds investigation identified significant gaps between the information presented during the original due diligence process and the underlying technical status of the program. Specifically, the review highlighted previously undisclosed technical challenges with the device, as well as substantial delays in the manufacturing and development timeline that were expected to impact the planned ANDA submission. Our findings enabled the client to gain a clearer understanding of the true status of the asset at the time of acquisition and to make informed decisions regarding the appropriate next steps, taking into account the potential commercial and regulatory implications of a delayed US filing.