In a recent op-ed for NJBIZ, Debbie Hart, President and CEO of PULSE Partner BioNJ, discusses how federal policy against mergers and acquisitions (M&A) could undermine New Jersey’s leadership in the life sciences. Read the op-ed below:
As the “medicine chest of the world,” New Jersey has brought new life-altering therapies and cures to patients for decades. Unfortunately, continued medical innovation is under threat from flawed antitrust policies that depart significantly from time-tested competition standards.
BioNJ, New Jersey’s life sciences association, represents more than 400 research-based life sciences organizations across the ecosystem from the largest biopharmaceutical companies to early-stage startups. Collectively, our industry supports more than 116,000 jobs across more than 5,600 establishments in New Jersey and has raised $4.1 billion in venture capital investments from 2019 to 2023.
The BioNJ community is dedicated to ensuring a vibrant ecosystem where science is supported, companies are created, drugs are developed and patients are paramount. But achieving this mission is no small feat: The drug development process is a high-stakes journey, typically spanning 10 to 15 years and costing $2 billion to $3 billion to bring a new medicine to market with only 12% of drug candidates entering clinical trials ultimately receiving approval for patient use.
Against these odds, mergers and acquisitions have long offered a path forward. In the unique context of life sciences innovation, M&A is a critical way to pair a therapeutic breakthrough with the resources, investment, capabilities and scale needed to bring it to patients in need. Without M&A, many treatments and cures used today would not exist.
M&A has been crucial in driving the strength of New Jersey’s biopharmaceutical industry. One notable example is Medarex, a small biotech company from Princeton, which merged with Bristol Myers Squibb in 2009, gaining the resources and expertise needed to advance two groundbreaking cancer therapies that have resulted in expanded treatment options for thousands of patients worldwide. Similarly, Celgene, based in Summit, merged with BMS 10 years later in 2019, following a similar trajectory and making a profound impact on patients.
To keep M&A a cornerstone of drug development, it’s essential to shield it from flawed antitrust policies that deviate from proven competition standards. In recent years, the Federal Trade Commission and the Department of Justice have pushed policy changes that restrict and discourage procompetitive M&A and partnerships — tools that are critical to advancing drug discovery and development.
These policy shifts risk discouraging life sciences M&A, harming patients and stifling innovation within the industry. The agencies have increasingly subjected life sciences deals to unpredictable and prolonged scrutiny, compounding the regulatory uncertainty that companies in this sector already face.
The 2023 merger guidelines give the agencies the power to challenge even clearly beneficial procompetitive mergers based on hypothetical assumptions, rather than actual evidence of harm to consumers. This creates unclear competition standards, leading to uncertainty, inconsistency and the blocking of valuable mergers.
The FTC’s recently finalized Hart-Scott-Rodino premerger notification rule has greatly increased information reporting requirements and costs for companies pursuing mergers or acquisitions. This added burden could deter many life sciences companies from seeking pro-innovation mergers. The impact of these policies will be felt most acutely by the 80% of life sciences companies that operate without a profit and for whom M&A represents a necessary path forward.
As the new administration takes office, we urge and look forward to working with policymakers to recognize the vital role of life sciences M&A and prioritize reviewing the impact of federal antitrust policies. “Because patients can’t wait.”
Debbie Hart is President and CEO of BioNJ, New Jersey’s life sciences trade association.
This op-ed originally appeared in NJBIZ.