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https://www.ferghanapartners.com/wp-content/u...igence.pdf

A bigger company putting 100M up on a small biotech partner for 12 years, probably spends enough time and money on due diligence research to get a very good idea about the ins and outs other company. Look at rules of what not to do; I suspect they have a good feel for investor sentiment.

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C-1 Sourcing Information On The Products/Technology/
Finance of a Counterparty A careful person should assume (a) that there may be no formal document from your adversary pulling together all needed information for you to use, and (b) if an Information Memorandum exists, that it is incomplete, even if it may be correct..... as far as it goes. Here are some sources that should be looked at by a careful buyer or in-licensor (this confirmatory work can be seen, by the way, as an extension of the prior analytical due diligence process):

1. Material published by the Counterparty, such as annual reports and science/technology/product introduction and press release packages (for public companies, some larger, older private companies and many aspiring but young biotech/pharma companies still in their private larval stage).

2. Industry publications (like Scrip, Clinica, Animal Pharm, InVivo, Start-Up and R&D Focus, Drug Market Development, Nature Biotechnology and its sister magazines)

3. News archives from magazines and science or clinical pieces in learned journals and institute proceedings...including electronic databases for literature searches on patents, mechanisms of action, scientific theories and experimental results. This process is crucial in evaluating the excellence and uniqueness of the product or technology at the heart of your deal.

4. The Internet, linking (a) to hubs on topics like neuroscience or diabetes or (b) to company-specific sites or (c) to databases on the therapeutic segment or industry sub-category to which the targeted product, technology or company belongs.

5. Research reports from brokers, industry analysts or consulting firms on the company, or on its technology or on the relevant industry segment.

6. Interviews with industry experts, sometimes retirees from the target company or from comparable businesses with market/technology expertise.

7. Biographies of, and news interviews with, the company founders or leading executives, usually vanity pieces in which unusually clear and proud disclosure is made.....including their personal/work histories that may intersect with your most feared competitors.

8. Dun & Bradstreet or Equifax reports for determining the financial strength of your counterparty...especially important if there are ongoing obligations such as funding R&D or paying milestone bonuses. This data can be supplemented by informal, but penetrating, chats with the bankers to, and investors in, the Counterparty...to see the nature and extent of financial support for it. If any doubts persist, talk to suppliers and other alliance/marketing partners

9. Filings at the local company registration agency, supplemented by published material on the Board and Management of the Counterparty, will start to reveal who holds power and has significant ownership. Further probing of consultants, allies and grant-making agencies will show who are the real-decision makers in this deal context. It should be noted that the pressures of business and your development team’s desire to succeed might tempt them to go beyond the bounds of what is proper and legal in gathering information.

There are not very many Rules, but here are a few caveats, to which you should be particularly sensitive:
A. Do not pretend to be someone else and do not permit your inquiring agents or advisors to tell lies or disguise their identity inappropriately, such as saying they are from a newspaper or television company
B. Do not hire people to go and work inside your competitor or a counterparty, with the specific objective of procuring non-public information, which will be later conveyed to you openly or clandestinely
C. Do not engage in wire-tapping or mail interception, as these two activities are highly illegal
D. Do not hire away employees from your competition or potential alliance counterparty and then induce them to break their ongoing Confidentiality Agreements....

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