September 01, 2008
When Cheryl Reicin joined Torys three years ago, she set a lofty objective: "My three-year goal was to act on the largest licensing and M&A deals in Canada’s life sciences sector."
No one could accuse her of setting the bar too low. She was a newcomer to Canada, following on a 20-year career in the United States, which included 10 years at McDermott Will & Emery, where she headed the firm’s 85-lawyer international life sciences practice.
In December 2007, Indianapolis-based pharmaceutical giant Eli Lilly and Co. announced that it was acquiring the rights to Edmonton-based BioMS Medical Corp.'s multiple sclerosis drug, and BioMS's legal mandate went to Cheryl. The global licensing and development agreement, in which Eli Lilly agreed to pay BioMS $87 million up front, and a further $400 million when the drug was marketed, marked the largest licensing transaction ever achieved by a Canada life sciences company. At the time, it was also the fifth-largest life sciences licensing deal globally.
On the M&A front, Cheryl had already achieved her self-imposed standard when Torys represented Credit Suisse and Merrill Lynch in Angiotech Pharmaceutical’s 2006 acquisition of medical device-maker American Instruments Holdings for $785 million. That was the largest life sciences acquisition ever by a Canadian company. In 2005, Reicin also acted on Aspreva Pharmaceuticals' $91 million IPO on the TSX and Nasdaq -- Canada’s largest life sciences IPO and its first simultaneous cross-border IPO in the sector.
Cheryl, who has maintained her U.S. practice through Torys' New York office, says her success is predicated on being in the thick of things: "Half my practice is still composed of U.S. deals, and I want to keep it that way because that’s how you stay in touch with the industry. If you were doing only Canadian life science deals, you couldn’t possibly offer the same level of service."
Kevin Giese, BioMS' president and CEO, is like-minded. "We needed someone with expertise in biotech licensing, U.S. licensing, and cross-border experience," he says. "One of our business advisers said Cheryl fit the bill, and that was obvious the minute we met her. We got what we expected, and she really brought all that expertise to bear. I’ve been in deals where I’ve had lawyers with tremendous expertise who still turned out to be bad lawyers. Instead of aiming for win-win, they draft documents with an eye to making negotiating points in situations where that does nothing but impede the process in terms of what’s important to the client."
The BioMS negotiations moved along very smoothly, says Kevin: "Both parties were motivated and the Torys team focused on the things that were important to us."
Cheryl, who notes that the U.S. biotech sector is humming along, is hopeful that the BioMS transaction will be a catalyst to the Canadian side of the industry. She thinks Canadian companies should put more focus on medical devices. "Medical-device start-ups require about $35 million of capital before they can get to an exit event. That’s a lot less than the hundreds of millions required to develop drugs. Companies based in Sweden, Israel and the far east have done very well in the medical-device arena."
In either case, the key for new organizations is to work with a realistic time frame. "People need to understand that biotech is not like other businesses," says Cheryl. "It takes many more years to hit a home run."