Reflecting on Year-End Life Science Companies' Agreements
As we close out 2025, life science firms face a more complex contractual environment than ever. Regulatory requirements are continually evolving, financial disclosures are requiring greater rigor, and U.S. and European data privacy statutes have undergone changes that directly affect biotech, pharmaceutical, and medical device operations. Reviewing your contract roster at year's end helps mitigate compliance exposures, maintain financial strength, and prepare you for strategic prospects in 2026 and beyond.
1. Financial & Accounting Alignment
Your current contracts need to be reviewed against accounting requirements, as outlined in Accounting Standards Codification 606 and International Financial Reporting Standards 15, specifically when milestone payments, royalties, rebates, or charge backs are involved. SEC focus remains on appropriate variable consideration. Due to their stage of development, early- stage companies also need to revisit the treatment of research and development costs and confirm that going-concern disclosures accurately reflect their financial realities.
2. Cooperation Agreements Regarding Intellectual Property
Licensing and collaboration continue at the heart of biotech, but IP ownership remains an ever-representational. Companies need to verify ownership of any of the year's created IP issued pursuant to joint ventures or partnerships, inspect sub-licensing rights, and consider whether it is appropriate to initiate any audits to verify compliance with disclosure of inventions. If not done, then downstream disputes or or loss of IP rights could occur.
3. Data Privacy, Vendor Monitoring & New Regulations
In March 2025, the new European Health Data Space (EHDS) Regulation was published, establishing a unified framework for the sharing and reuse of electronic health data across EU member states, while enhancing interoperability and safeguarding patient opt-out rights. Meanwhile, the EU Data Act, which went into effect on September 12, 2025, established new data access and data sharing rights provisions—a development of particular relevance to digital health platforms and wearable devices. On the other side of the Atlantic, seven states have seen comprehensive privacy laws take effect (Delaware, Iowa, Minnesota, Nebraska, New Hampshire, New Jersey, and Tennessee), adding complexity to the privacy landscape. Of additional concern here are biotech/life sciences companies regarding genetic data privacy bills being initiated across multiple states. Against such a backdrop, agreements with CROs, cloud suppliers, and data platform companies must address the geographic data storage of clinical data specifically, including audit and deletion rights, as well as allocate responsibilities for GDPR compliance with state law.
4. Contract Performance & Strategic Planning
Now is the time to audit milestones, confirm that obligations were met, and evaluate whether termination or amendment clauses remain fit for purpose. Agreements should also be stress-tested for flexibility in upcoming mergers and acquisitions (M&A), capital projects, or vendor transitions. Contracts are not only compliance tools; they are also instruments of growth and development.
5. Tips Easily Forgotten
Change of Control Provisions: Many companies overlook the fact that mergers or acquisitions often trigger renegotiation or termination rights.
Force Majeure Refresher: The supply chain disruptions and geopolitics suggest that older provisions may no longer be adequate.
Data Destruction & Retention: Agreements need to include data deletion timelines as well as destruction processes. Ensure that necessary insurance protection, such as clinical trial insurance, cyber liability, and product liability, is up to date.
Dispute Resolution Provisions: Ensure that provisions for jurisdiction, arbitration, or mediation continue to align with your international reach.
In life sciences, contracts are more than paperwork; they’re the bridge between discovery and delivery. A year-end review is your chance to make sure the science you’ve advanced this year is protected, the dollars tied to milestones and royalties are accounted for, and the latest privacy and regulatory shifts won’t catch you off guard. Just as important, it’s about asking whether your agreements give you the flexibility to seize what’s next. By taking the time now, you walk into 2026 not just compliant, but confident, knowing your contracts are working as hard as your science.
Need help assessing your agreements or preparing for regulatory changes? Book your Business & Legal Power Hour for tailored guidance and next steps.
