Innovative Insights: Legal Updates in Life Sciences | Third Quarter 2026
ISSUES AND UPDATES
Innovation Effects Are Front and Center: What Recent FTC Enforcement Signals for Life Sciences Deals
Two recent life sciences matters highlight that the current Federal Trade Commission ("FTC")—notwithstanding departures from certain Biden-era antitrust priorities—remains focused on innovation effects and potential competition in the life sciences sector, regardless of whether the competition is seen between on-market products or potential ones. Edwards/JenaValve and Alcon/LENSAR together underscore that innovation-focused merger enforcement is not a relic of any single administration; it is a durable feature of FTC review in the life sciences sector. Companies should plan for potential agency review accordingly.
AI Meets the Lab
The rapid emergence of Artificial Intelligence ("AI")-driven drug discovery platforms from major technology companies and frontier AI labs is reshaping how pharmaceutical companies approach early-stage R&D and pipeline replenishment. As technology companies and frontier AI labs increasingly treat life sciences AI as a core strategic vertical, the collaboration agreements underpinning these partnerships will need to address a different set of commercial, intellectual property, and data governance dynamics than traditional R&D deal structures were designed to handle. Key issues include Intellectual Property allocation where AI-generated outputs blur the line between platform and collaboration-specific inventions, data ownership and model training rights, platform dependency and portability, cross-border data transfer obligations, and evolving regulatory requirements. With aggregate spending on AI drug discovery estimated to have reached $8.5 billion globally through 2025, the legal and operational questions these arrangements raise are urgent for pharma companies, emerging biotechs, and platform providers alike. As the landscape continues to evolve, stakeholders should ensure that the agreements underpinning these collaborations are built for the dynamics they actually involve, and that internal governance, risk frameworks, and negotiating playbooks reflect the unique characteristics of AI-enabled drug discovery collaborations.
DOJ Announces Significant Changes to Justice Manual Concerning Dismissal of FCA Qui Tams and the Issuance and Use of Sub-Regulatory Guidance
On September 18, 2026, the Department of Justice ("DOJ") announced Justice Manual revisions addressing two False Claims Act ("FCA")-related subjects: dismissal of qui tam suits over a relator's objection, and the use of sub-regulatory agency guidance in litigation. Revised Section 4-4.111 now requires DOJ attorneys to assess dismissal in every case before declining to intervene, and permits dismissal of qui tams deemed "meritless," dropping the prior "facially" qualifier and potentially reaching cases DOJ investigated but could not substantiate. The manual notes that dismissal "will not be warranted in every declined case," but that DOJ may revisit dismissal as litigation progresses. Separately, revised Sections 1-19.000 and 1-20.000 largely restore first Trump administration limits on DOJ's use of nonbinding agency guidance. Those limits are not absolute: guidance may still be offered to prove scienter, notice, or knowledge, and Medicare manuals and coverage determinations remain relevant evidence, so guidance will likely remain significant in FCA litigation.
EXECUTIVE ORDERS AND POLICY UPDATES
Over the last few months, governmental agencies in the United States and Europe have released a number of policy and regulatory actions that are impacting the life sciences industry. There have been developments in a number of areas, including drug pricing, artificial intelligence, and medical device reform. Some actions remain the subject of ongoing litigation.
RELEVANT RESOURCES
- SEC Proposes to Rescind Rule 14a-8: What Companies Need to Know
- National Fraud Enforcement Division Structure and Enforcement Priorities
- Shareholder Proposal Litigation Increases Following the SEC's Revised Rule 14a-8 Process
- JONES DAY PRESENTS®: Managing Multijurisdictional Tax Disputes in Europe
- Legislature and Appellate Court Bring Clarity to California Invasion of Privacy Act
- Second Circuit Holds that Delayed, Market-Tracking Stock Drop Dooms Loss Causation
- Vital Signs: Digital Health Law Update | Spring/Summer 2026
- Heightened Scrutiny: HHS Denies Recertification of New York's Medicaid Fraud Control Unit
- EU Cybersecurity Act 2 Advances Amid Member States' Concerns Over EU Competence
- The Revised EU Product Liability Directive: State of Play Across EU Member States and Evolving Risk Landscape
- U.S. Supreme Court Weighs In on "Skinny Labels" and Inducement
- Draft EU Guidelines Clarify When AI Systems Are High-Risk Under the AI Act
- DOJ Announces Accelerated Review and Enhanced Enforcement in Benefits Fraud Matters
- China Launches Pharmaceutical Regulatory Data Protection Regime on May 15, 2026
- A Major Overhaul of the UK Product Safety and Market Surveillance and Enforcement Regime
- UK Clinical Trials Enter a New Regulatory Era
NEWSWORTHY
Kyndryl acquires Healthcare IT Leaders
BioCircuit Technologies to be acquired by Axogen
BioMarin acquires Alesta Therapeutics
Radiology Partners acquires Everlight Radiology
Innate Pharma S.A. completes €30 million private placement of Ordinary Shares
Riverside acquires Yellow Emperor
The Procter & Gamble Company acquires Thorne from L Catterton for $3.8 billion
AmbioPharm sells company to CordenPharma
ResMed sells MatrixCare business to Frazier Healthcare Partners
Kroger announces agreement to acquire Giant Eagle for $1.65 billion
Guardian Pharmacy Services acquires Wellness Concepts
Riverside sells YumEarth to ACON
Bora Pharmaceuticals acquires MacroGenics, Inc.'s GMP manufacturing operations
Acton Capital, Citizen Capital and XAnge invest €21 million in Semeia
BioMarin acquires Amicus Therapeutics for $4.8 billion
Asia-based family office completes convertible note restructuring of life sciences start-up
MPE Partners portfolio company acquires NANUK Gear Protection
Sanofi sells commercial-scale sterile fill-finish manufacturing site in France to Adragos Pharma
LAWYERS SPOTLIGHT
Jake Bergman recently joined the New York Office as a partner, bringing nearly two decades of government enforcement experience to Jones Day. He served for nearly 12 years as an Assistant U.S. Attorney in the Southern District of New York—most recently as Co-Chief of the Civil Frauds Unit—and for seven years at the New York State Attorney General's Medicaid Fraud Control Unit, where he led and supervised landmark health care fraud investigations into major pharmaceutical and life sciences companies. He now counsels clients navigating civil, criminal, and regulatory matters involving the False Claims Act, the Anti-Kickback Statute, the Stark Law, the Federal Food, Drug, and Cosmetic Act, and FIRREA, drawing on his deep familiarity with the strategies of federal and state enforcement agencies. In the coming months, he anticipates continued aggressive use of the False Claims Act by both federal and state enforcers, driven not only by traditional whistleblower-initiated actions but increasingly by government investigations initiated through AI-assisted analysis of Medicare and Medicaid claims data.
David Lee is based in our Irvine Office, where he has a broad-based corporate practice. He focuses most of his work on life sciences and health care, and has done deals for branded drugs, contract development and manufacturing organizations (CDMOs), medical devices, diagnostics, skilled nursing facilities, senior living assets, group purchasing organizations, and home health care exam providers. The deals range from startup Series A preferred stock financings to joint ventures to M&A, covering the complete lifecycle of companies in this industry. He has a particular specialty in cross-border deals involving China or Taiwan. In recent years, he has seen a growing trend of U.S. firms licensing Chinese biotechnology, as that country's biotech innovation grows. He has also seen a trend toward outsourcing drug production to CDMOs, as pharmaceutical companies shed these less profitable portions of their business.
Frank Voon is a Hong Kong-based partner in the Corporate Practice with over 20 years of experience advising on cross-border corporate and M&A matters. A key focus of Frank's practice involves advising pharmaceutical, biotech, medical device, and health care companies on M&A, product distribution and commercialization, licensing, and R&D collaborations. Frank has lived and worked in Australia, Singapore, Mainland China, and Hong Kong. In addition to the robust pipeline of Hong Kong IPOs for Chinese biotech companies over the past two years, Frank is seeing a notable increase in out-licensing transactions—where Chinese pharma and biotech companies grant rights to third parties to develop and commercialize their technology internationally—as well as growing interest from foreign companies in accelerating clinical development in Mainland China alongside local institutions.
