Why IT Needs a Seat at the Table During Due Diligence

  • Jul 30, 2018

This blog is part 1 of a three-part series titled “The Role of IT in Life Sciences Mergers & Acquisitions.”

Without taking proper evaluation of all tech assets, life science companies put post-M&A operations at risk.

As a life sciences company in today’s competitive landscape, odds are that your organization will be part of at least one merger, acquisition or divestiture. These deals can vary widely in structure but what they all have in common is the need to integrate the data and content associated with the purchased assets in a compliant manner, with minimal disruption to operations.

Beginning day 1, employees need access to their email and critical systems like ERP, LIMS, eTMF – and let’s not forget your adverse event reporting system. Compliance obligations have no grace period, and whether a product is mid-pipeline or on the market, the clock is not going to stop on its development or countdown to patent expiration.

Integration, however, is not simply a matter of everything being “carried over.” The waters can get murky fast. Here’s why you’ll want your IT organization deep in the trenches early, even as the deal is being drawn up.

Ensuring System Integrity

Whether you’re acquiring an entire company or purchasing a divested product, the deal needs to account for how tech resources will be managed moving forward.

For example, if company A is purchasing product X from company B, a large pharmaceutical company, then company A needs a way to obtain quality documents exclusive to product X. The most intuitive solution might be to copy company B’s system and delete extraneous files to supply the documents needed, but what if company B’s system is an obsolete software that’s no longer supported, or a homegrown on-premise system that raises red flags for compliance?

Who is responsible for ensuring the files are housed in a secure, supported format on day 1? IT’s role in due diligence is to confirm system integrity and compliance – and to advise on how to bake related safeguards into your inked agreement before the deal is done.

Getting What You Paid For

While the focus of an M&A agreement is the value of the product, it’s important to remember that a product’s value is dependent upon the technologies that sustain its marketability and/or push it through the pipeline.

For example, you may want to pursue a new indication for a drug you are gaining in your acquisition, but even if your plan is to change course, your IT department needs to take stock of the files at hand. If years down the line, you realize you need access to the pre-deal toxicology reports, clinical study reports or other submission documentation and it’s nowhere to be found, you’ll be losing precious time in the drug development timeline.

Bottom line: no matter the details of your deal make sure you’ve taken a thorough inventory of your tech assets before you sign on the dotted line. From operations and compliance to R&D and marketability, the long-term value of your investment depends on it.

Share This Post