As many life sciences companies and investors are aware, the U.S. Department of the Treasury (“Treasury”) recently announced a new “pilot program” for the Committee on Foreign Investment in the United States (“CFIUS”) effective November 10, 2018. The pilot program implements certain provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which brought sweeping change to CFIUS’s authority to conduct national security reviews of foreign acquisitions of and investments in U.S. businesses in high-technology fields.
What companies and investors may not yet fully appreciate, however, is the scrutiny that the new CFIUS pilot program brings to foreign investors that focus on research and development in pharmaceuticals and biotechnology, as well as to the U.S. businesses active in these sectors that seek to raise such financing. This Client Alert addresses issues that life sciences companies and investors should be considering in light of these new requirements.