Sidley Austin had spent years expanding his transactional expertise in life sciences when he hired Ropes & Gray’s private equity partner Christopher Rile and Cravath Swaine & Moore’s capital markets partner Johnny Skumpija.
The 2021 moves have paid off. This year, the pair helped French private equity firm Eurazeo invest $200 million in Cranial Technologies, which treats babies who develop flattened skulls, a condition known as plagiocephaly.
Five years after deciding to build it, Sidley has grown its life sciences practice into a $700 million business with more than 200 attorneys. Since 2019, the firm has brought in 30 side partners, two-thirds of them in the transactional space, as Sidley rode a wave of investment in the sector during the coronavirus pandemic.
The company wanted to merge what it saw as a strength in life sciences regulatory work with its mergers and acquisitions practice to create something “unique”, said Sharon Flanagan, co-head of the practice of life sciences, in an interview.
“It’s the convergence of growth in the industry, and then the investments that are made, and then our ability to put those two pieces together,” she said.
The company turned to its own life sciences playbook, employing the same strategy it used a decade ago to build a $550 million private equity practice through to lateral hires.
Sidley had long been a top life sciences firm, particularly for high-stakes regulatory work and complex board-level litigation, said Zeughhauser Group consultant Kent Zimmermann, who advised Sidley.
The company has used the “halo effect” — its reputation for excellence in one area to influence the views of other practices — to develop the transactional side of its life sciences practice, Zimmermann said.
Sidley is “smart” in focusing on all aspects of the life sciences, said Christina Sautter, a professor at Louisiana State University Law School and a former mergers and acquisitions lawyer at Shearman & Sterling.
Traditionally, M&A teams have outsourced transaction regulatory functions to other firms. “If you have everything in-house, it changes the ball game and obviously generates a lot more revenue for the business,” she said.
The life sciences sector has been and continues to be one of the “hot” areas, Sautter said.
Pharmaceutical giants such as Pfizer Inc. acquired smaller companies and made investments to further develop research and development pipelines, while private equity focused more on investments in life sciences and pharmaceuticals. Health care.
Private equity investment in biotech has reached nearly $190 billion, including about $319 billion in healthcare products and services since 2019, according to Bloomberg data.
Sidley ranks among the top 20 law firms advising on such transactions, according to the data. The firm has worked on 103 deals worth $15.7 billion over the past three years.
The firm has worked on more than 370 mergers and acquisitions transactions worth $77 billion and more than 145 capital markets transactions worth $98 billion in three years in the field of life sciences. life, Sidley said.
Last month, the company helped acne treatment Hero Mighty Patch be acquired by Church & Dwight Co., owner of the Arm & Hammer and OxiClean brands, for $630 million in cash and restricted stock. The company also represented Walgreens Boots Alliance Inc. in its August acquisition of a majority stake in home health platform CareCentrix for $1.37 billion.
Companies are ‘aggressively trying to expand private equity and M&A, especially where it intersects with technology and life sciences, simply because there has been and will be so much’ activity , said Zimmermann.
California-based companies Cooley, Wilson Sonsini Goodrich & Rosati and Fenwick & West have been mainstays in the life sciences industry, as have Boston-based Goodwin Procter and Ropes & Gray and Washington-based Covington & Burling. But, like its private equity, the historical strength of some rival companies in the sector has not hindered Sidley’s ambitions.
“We continue to see partners in other businesses trying to follow their customers and recognizing that their customers are looking for a place where the customer won’t overtake the business,” Flanagan said.
All the pieces
Sidley made lateral hires to bolster its life sciences strategy.
The company added a group from McDermott Will & Emery that included the head of its global healthcare real estate practice, Ankur Gupta. Sidley chose co-head of Hogan Lovells’ global life sciences industry practice, Asher Rubin, whose clients include Exact Sciences Corp., Galera Therapeutics Inc. and NextCure Inc., as well as Jim Johnson, who led the proper manufacture of Hogan with the FDA. practice.
Sidley also landed Cooley’s Frank Rahmani to help build his emerging business capabilities, which through early 2022 saw a record number of life sciences companies go public.
“You work really hard to nurture emerging businesses, fund them, take them to the next level, and then that business, it grows, and invariably that business will have requests,” Rahmani said, whether it’s advice complex regulatory issues across multiple continents, litigation, or the work of the FTC’s public companies.
Some companies miss out on those capabilities by adding just a few people here and there, he said. “You want a company that has all of those pieces,” Rahmani said.
Life sciences and healthcare was a driving force earlier this year in opening Sidley’s Miami office, which has grown to more than 30 lawyers and will continue to be an investment hub, even as the firm invests in other areas, such as restructuring, said Yvette Ostolaza. , chairman of the firm’s management committee.
“We’re just one of the few companies with annual revenue over $3 billion,” Ostolaza said. “As you can imagine, having that kind of income allows you to not have a zero-sum game.”