Law firm leverages expertise to assist biotech companies in scaling

This unique biotech legal accelerator program is designed to propel innovative biotech ventures into the market, with the assistance of a legal grant from Ballard Spahr and the innovation and collaboration of South Dakota Biotech.

The first four participating small businesses, identified by South Dakota Biotech, were matched with a legal professional from Ballard Spahr to cover topics such as the business formation process, risk and liability, asset protection and intellectual property, HR best practices and company culture.

“These participants are gaining access to legal expertise, mentoring and networking, while accessing the tools they need to take the next step in their business,” said Amy Arndt, a partner with Ballard Spahr, whose roles at the firm include serving as practice leader of the owner-managed and closely held business group.

“Our curriculum spans four months and next year will grow to eight months with six cohorts, so it really allows them access to legal services,” Arndt said.

“And as they develop relationships with lenders, this association with Ballard Spahr will give them increased credibility, which is important as these companies can face added challenges when it comes to securing operational financing for future business operations.”

Ballard Spahr has committed $300,000 of in-kind legal services to the program over the next five years.

“This has been a phenomenal new relationship and has the potential to add so much more value,” said Joni Ekstrum, executive director of South Dakota Biotech.

“This launchpad provides the sort of guidance many of our companies need to ensure their discoveries are protected and their business is structured appropriately as they begin to scale.”

Ballard Spahr also will share insight through one of the panel discussions at the South Dakota Biotech Summit titled Unlocking Capital: Exploring Funding Pathways in the Biotech Industry.

It will be moderated by Scott Marty, an attorney with Ballard Spahr who serves as co-leader of the firm’s life sciences industry group, leader of the patent group’s biotechnology team and a member of the pharmaceutical team. His practice focuses on various aspects of biotechnology patent prosecution, diligence and patent litigation, including post-grant proceedings before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board.

Marty’s clients run the gamut from multinational Fortune 500 companies to emerging growth startups.

“Scott is an IP attorney who is very invested in the Sioux Falls area and travels at least annually for the South Dakota Biotech Summit because he works with so many of our clients here,” Arndt said.

“We have a really robust IP practice within the firm generally, with many of our attorneys holding Ph.D.s in the life sciences and various other areas of specialty. It allows us to bring in resources for clients we otherwise would have had to refer to larger markets.”

Marty will be joined on the panel by Kelly Herrmann, an attorney in the Sioux Falls office who is working closely with Project Biotech Launchpad.

“What we’re hearing from biotech businesses is that they need funding. They need cash,” she said. “They have all this discovery going on, and they don’t have the cash to take it to the next step, and often they come to us knowing they need to do a capital raise.”

That’s a highly regulated process, but it’s one Ballard Spahr is uniquely positioned to facilitate. The firm draws on layers of expertise to guide biotech companies through multiple paths to raising capital, connecting with private equity and ultimately managing an M&A process, ESOP transition or other business exit strategies.

“Because we also represent many private equity funds, there are times we’re able to make introductions and bring that value to clients on both sides of the deal,” Herrmann said. “Through the launchpad program, it’s been fun to connect with some these companies, including several in the medical field and one that has a provisional patent and is a little farther in the monetization and development process.”

It’s key to seek legal expertise up-front, especially when raising capital, Arndt added.

“When startups take a haphazard approach and start taking cash, it matters at an exit event,” she said. “There’s due diligence that goes all the way back, and we can spend a lot of time trying to remedy things we could have handled up-front if the relationship had started earlier in the business development process.”

The good news is South Dakota is enjoying more opportunities for businesses to access capital, she said.

“There’s a lot of private equity and investment capital here in multiple funds, with investors who specifically want to invest in South Dakota manufacturing and biotech companies,” Arndt said. “You can even see this at an event like the South Dakota Biotech Summit, which I feel like has made the business side of the industry a clear focus of the program. That’s really fun to see.”