News & Insights

  • 19/04/2021
  • News

Van Bael & Bellis secures top-tier position in The Legal 500 2021

In the Legal 500 2021 rankings recently published online, Van Bael & Bellis once again secures its position in the top tiers of these rankings with six practice areas ranked in tiers 1 and 2. Van Bael & Bellis consolidates its position as a leading law firm with 28 lawyers recognized by the directory, where 7 lawyers are listed as "Leading individuals" and three lawyers as "Next Generation Partners". The firm also see one of its associates recognized as a "Rising Star". Team rankings and a flavour of their accolades now follow. Customs, Trade and Anti-dumping (Tier 1): ‘The trade and customs practice's “levels of expertise are exceptional” and, as a result, the team “knows which battles to fight” when advising on EU anti-dumping and anti-subsidy investigations, as well as WTO disputes.’ Healthcare and Life Sciences (Tier 1): ‘Catherine Longeval and pharmaceuticals specialist Peter L’Ecluse co-head the team, with Longeval praised for offering “incredible depth and breadth of regulatory knowledge”.’ Competition - EU and Global (Tier 2): ‘[Van Bael & Bellis] are extremely good in competition law, if not the best I have worked with. They are exceptionally competent, business-minded and very reactive in their replies: all one can need!’ Competition - Belgian Law (Tier 2): ‘Van Bael & Bellis is a major player in all areas of Belgian competition law and is trusted by clients to handle their most reputationally-sensitive and business-critical matters.’ Dispute resolution (Tier 2): ‘The 'superb' Catherine Longeval heads up the department at Van Bael & Bellis, which is well known for its strength in handling competition and life sciences litigation.’ Commercial, Corporate and M&A (Tier 3): ‘Van Bael & Bellis' team demonstrates strong capabilities in high-profile corporate transactions and other complex mandates of the utmost significance for its clients.’ EU Regulatory - Privacy and Data Protection (Tier 3): ‘Van Bael & Bellis' team is assisting Gedeon Richter with implementing the ePrivacy Directive throughout the EU. GDPR compliance is another key area of expertise for the group.’ Intellectual property (Tier 3): ‘Van Bael & Bellis combines IP expertise with knowledge about related competition, regulatory and sector-specific issues. Equally strong in Belgian and cross-border matters, the firm acts for companies operating in industries such as pharmaceuticals and biotech, consumer electronics, IT, sports and entertainment.’ Employment (Tier 4): ‘Van Bael & Bellis' 'very committed and dedicated' team is noted for its 'pragmatic yet thorough approach' to employment law, and has been kept particularly busy handling restructurings and collective dismissals recently, often with cross-border elements.’ The lawyers recognised by Legal 500 across these nine practice areas are: Sarah Arens, Jean-François Bellis, Sara Beutels, Michel Bonne, Michael Clancy, Gabriele Coppo, Philippe De Baere, Quentin Declève, Thibaut D’hulst, Clotilde du Parc, Porter Elliott, Fabrizio Di Gianni, Catherine Gordley, David Hull, Tim Kasten, Andrzej Kmiecik, Peter L’Ecluse, Valérie Lefever, Catherine Longeval, Richard Luff, Hannelore Matthys, Pablo Muñiz, Andreas Reindl, Yuriy Rudyuk, Aldo Scalini, Benoît Servais, Michel Struys, Koen T’Syen, Johan Van Acker, Kris Van Hove, Markus Wellinger. The full rankings can be accessed here.

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    • 07/05/2021
    • Articles

    Pharmaceuticals – Dealing in Uncertain Times – The Article 22 Merger Procedure

    With the Commission’s publication of Guidance on its expanded use of the Article 22 merger review procedure, and its immediate use against the Illumina / Grail transaction, pharmaceutical companies face a new world where any acquisition of a small biotech or company with key technology could now face a merger control investigation and potentially a prohibition. So what can pharmaceutical companies do in these uncertain times… Background In recent years, the European Commission has expressed concerns that large companies in the pharmaceutical and tech sectors are conducting “killer acquisitions” of new entrants or smaller competitors that fall below the revenue thresholds for merger review. In order to address this concern, the Commission expanded the use of Article 22 of the Merger Regulation in a manner that would effectively empower the Commission to review any transaction. Under Article 22, any national competition authority (on its own motion or following encouragement by the Commission or by interested parties) may refer a transaction to the Commission, even if the transaction does not meet EU or national merger thresholds. Further, such a review process can be triggered even after the closing of the transaction. For companies in the pharmaceutical sector, this means that transactions involving a biotech or other company with little revenue could still be subject to a merger clearance process, even after closing, and could potentially result in a prohibition or required changes. Dealing in Uncertain Times Identifying At-Risk Transactions While the Commission has issued guidance concerning the characteristics of transactions that may be caught, companies operating in the pharmaceutical sector will not find much comfort, as the characteristics will fit many transactions in the sector. These characteristics include transactions involving a target (i) with turnover/revenue that does not reflect its actual or future competitive potential or that is significantly lower than the consideration being paid to the seller, (ii) that is an important innovator or is conducting potentially important research, (iii) has access to competitively significant assets (such as raw materials, infrastructure, data or intellectual property rights), and/or (iv) provides key inputs/components. Pharmaceutical companies therefore are largely left to assess for themselves the practical risk of a transaction being subject to the expanded Article 22 procedure, taking into account possible challenges by competitors, customers, payors or suppliers, or an investigation initiated by a competition authority. Particular care is recommended for any transactions that could be politically sensitive or important to national health authorities or payors, which are more likely to be pursued by the competition authorities. The Illumina / Grail transaction provides a good example, as the case concerns next-generation gene testing for cancer, a topic that is important to the Commission’s Beating Cancer Plan. Negotiating Contractual Protections Deal terms will need to address this new risk of an Article 22 referral and merger review process, including the possibility of a decision imposing conditions or prohibiting the transaction. These terms will also need to address the possibility that a review could be initiated up to six months post closing, or even longer if the transaction raises serious competition law concerns. Informal Consultation with the Commission? The European Commission has indicated that it may be willing to provide informal guidance to parties concerning whether the transaction would likely be caught by the Article 22 procedure. However, as any guidance would be non-binding, the parties would only get very little legal certainty in the best scenario. For this reason, the main benefit from an informal consultation would arise where a transaction could raise substantive issues or is likely to be reviewed, in which case a pro-active approach would allow the parties to present their case and avoid that the authorities only hear from parties seeking to block the deal. Make the Transaction “Known” to National Authorities? Where a notification is not required in a Member State, the EU Merger Regulation specifies that national competition authorities may only refer the transaction to the Commission if the referral occurs within 15 working days from when the transaction is “otherwise made known” to the authority. This rule creates the opportunity for the parties to informally notify relevant national authorities of the transaction (so that the transaction is “made known” to the authority), and then await expiry of the 15-day period before closing the deal. Through such a step, the parties may achieve additional comfort that the transaction would not later face referral and review by the Commission after closing. However, the use and effect of such an informal notification remains untested, and may not be beneficial for all transactions. Currently, the law is not clear concerning what information would have to be provided to an authority for the transaction to be “made known”, and prevent a later referral after the expiry of the 15-day period. Further, the parties may incur significant costs and legal fees notifying authorities in all relevant countries. For these reasons, parties might instead choose to proceed without any informal notification or consultations, particularly where the transaction does not raise any significant substantive competition law issues and therefore is unlikely to face any later decisions requiring remedies or the unwinding of the deal. Influencing Whether the Commission Will Pursue an Article 22 Request The Commission’s Guidance indicates that the parties will be notified “as soon as possible” where a referral request is being considered. Parties to a transaction may therefore have a brief opportunity for informal submissions to the Commission and national authorities, seeking to convince the authority that the transaction does not merit referral. However, in light of the very short timelines available to the authorities to decide whether to refer a transaction, any opportunity for submissions and consultation would be very limited, and such measures are only likely to have an impact for simple transactions with no significant competition law concerns. Procedure if the European Commission Accepts the Referral If the Commission accepts a referral, the parties will be required to notify the transaction and the resulting review of the transaction will be largely governed by the standard EU merger review rules and procedures. As an exception, the “stand-still” obligation on the parties will only apply if the transaction has not already been implemented on the day on which the Commission informs the parties of a referral request from a national authority. New Opportunities for Third-Parties to Challenge Transactions While the expanded use of the Article 22 procedure creates significant risks for merging parties, it creates opportunities for competitors or other parties interested in challenging transactions. The European Commission’s guidance specifically welcomes third parties to “contact the Commission or the competent authorities of the Member States and inform them of a concentration that, in their opinion, could be a candidate for a referral under Article 22 of the Merger Regulation.” Suffice it to say, this creates a significant opening for any interested party to raise issues and introduce additional uncertainty for the parties seeking to complete or implement a transaction, even after closing.

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    • 07/05/2021
    • Articles

    European Commission Unveils EU Strategy for Covid-19 Therapeutics

    On 6 May 2021 the European Commission (the Commission) presented its EU Strategy for Covid-19 therapeutics (the Therapeutics Strategy or TS) (see, attached Commission press release, memorandum and fact sheet). The TS seeks to complement the EU Vaccines Strategy which the Commission unreservedly qualifies as “successful” (see, Van Bael & Bellis Life Sciences News Alert of 18 June 2020). It contains seven sets of structural measures designed to deliver therapeutics for patients affected by Covid-19, including people suffering from the long-term effects of the Covid-19 infection which are known as “long Covid”. These cover the following areas: • Research, development and innovation – Under the TS, the Commission will create a Covid-19 “therapeutics innovation booster” platform by July 2021 and support additional R&D. • Clinical trials – The TS will improve clinical trials in several ways, including the cooperation in safety assessment; the generation of high-quality safety data; the pre-authorisation assessment of clinical trials; and the building of capacity for high-grade material used in clinical trials. • Scanning for candidate therapeutics – The TS will expand the portfolio of promising therapeutics. • Supply chains and delivery of medicines – The TS will offer funding for various manufacturing initiatives. • Regulatory flexibility – The Commission will both maximise the effect of existing procedural possibilities, such as conditional marketing authorisations, and consider creating new avenues, including an EU emergency-use authorisation of medicinal products. • Procurement and financing – The Commission will enhance the capabilities of existing instruments such as the Joint Procurement Agreement for medical countermeasures and advance purchase agreements. Significantly, it also plans to create a fast-track pathway for the joint procurement of medical countermeasures. • International cooperation – The Commission will further engage with international partners and increase the assistance extended to affected third countries. In addition to announcing these structural measures, the Commission also makes the bold promise to authorise three new therapeutics by October 2021 and possibly two more by the end of the year.

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    • 28/04/2021
    • Articles

    Patent Settlements – What’s Next Following Lundbeck and Generics (UK)?

    The recent judgments by the EU Court of Justice in Lundbeck (citalopram), as well as the Court’s prior judgment in Generics (paroxetine), provide important clarity on the legality of pharmaceutical patent settlements under EU competition law. However, important questions remain unresolved. QUICK BACKGROUND The judgments in Lundbeck and Generics (UK) establish that patent settlements are unlawful if a generic supplier commits to delay or forgo market entry in exchange for an unjustified value transfer from an innovator. This principle applies even if there is the possibility that the generic supplier may infringe the innovator’s valid patent rights. In such a situation, the generic may be considered as a potential competitor if it has taken preparatory steps to enter the market (e.g. obtaining regulatory approval, sourcing stock of products and preparing a patent challenge), and any inducement to encourage such a potential competitor to cease its patent challenge and stay off of the market will likely violate EU competition law. OPEN QUESTIONS Is a settlement involving a license and royalty allowable? For innovators and generic suppliers seeking an alternative settlement structure to resolve disputes or uncertainty concerning patent validity or infringement, one option is for the innovator to grant the generic a license to enter the market prior to patent expiry, subject to the generic paying a royalty at a negotiated level. Such structures are, however, not without risk. In the still ongoing Servier case, the Commission decided that one such settlement was unlawful, but this decision was annulled on appeal to the General Court, and the issue remains to be addressed by the Court of Justice. When might a value-transfer to the generic supplier be allowable? Any value transfer to the generic supplier must not have the object of reducing or eliminating potential competition between the parties. The Generics (UK) judgment indicates that the following value transfers may be allowable: (i) reimbursement of costs of disruption caused by litigation, (ii) payment for actual goods or services, or (iii) reimbursement for discharge of prior undertakings given by the innovator (e.g. a cross-undertaking in damages). However, the Court takes care to note that any value transferred must “correspond in fact” to the justification, and thus must not be a disguised means of transferring additional (unjustified) value to the generic supplier. What is the impact of Brexit? Following Brexit, EU case law will no longer be binding on the UK competition authorities and courts, and it remains possible that they may adopt a divergent approach to that taken in the EU. The first illustration of this could occur in the Generics (UK) case, where the EU Court of Justice established the applicable legal principles to be followed (in a judgment two days before Brexit), but the case now reverts to the UK Competition Appeal Tribunal to apply the guidance to the specific settlements at issue in that case. As the first post-Brexit UK judgment on this issue of patent settlements, this new judgment by the CAT will be highly influential for the assessment of future settlements in the UK. Other Open Questions Many other open questions remain, as each patent settlement has unique features and context. Examples of further issues still to be resolved include: (i) settlements involving disputes on the validity of the compound patent (rather than the process patents at issue in Generics (UK) and Lundbeck) and (ii) the legality of pan-European settlements of complex patent disputes that might benefit competition in some countries while reducing competition in others. FUTURE ENFORCEMENT IN EU With the Generics (UK) and Lundbeck judgments, and the upcoming Servier judgment, the European Commission will have largely achieved its objective of establishing the legal principles governing reverse-payment patent settlements under EU competition law. Future enforcement actions concerning patent settlements will therefore likely shift to the national competition authorities of the EU Member States. The European Commission’s focus will likely shift to other topics, such as the new investigation launched against Teva concerning “misuse of patent procedures”.

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    • 28/04/2021
    • Articles

    Belgium – Parliament Reviews Health Crisis Bill

    The federal government submitted last week to the federal Chamber of Representatives (the Chamber) a bill “providing for measures to contain the Covid-19 pandemic and other urgent measures in the realm of healthcare” (55K1929) (the Bill – see, attachment). When adopted, the Bill will introduce a series of rules governing the supply of medicines, medical devices and other health products. Some of these measures are specific to Covid-19, but others have a general scope of application. A Royal Decree may declare several rules that target the Covid-19 pandemic applicable to future pandemics as well. The federal government will have that power until 31 December 2025 (Bill, Article 66). Additionally, the Bill will tackle further health-related subjects as diverse as the financing of hospitals; testing strategies, pricing and funding; information technology and technological instruments for healthcare; and the reimbursement of combined medication which consists of several active substances. As regards the supply of medicines, medical devices and other health products, the Bill establishes a statutory basis for the following measures: • Creating a government-run strategic stock of medicines, raw ingredients, medical devices, blood, human tissue and cells, and personal protective equipment. The strategic stock will not only be designed to deal with the Covid-19 pandemic but is supposed to ensure the continuity of care generally (Bill, Articles 4 and following). • Making a range of members of the supply chain subject to a reporting obligation for designated products in order to help the government manage its strategic stock (Bill, Article 7). • Making it possible to have the government import, distribute and supply unauthorised medicines to tackle the Covid-19 pandemic during a limited period of time (Bill, Article 8). • Creating the possibility, subject to strict conditions, to make an unauthorised alternative for an authorised medicine available, regardless of the medical condition at issue (Bill, Articles 10 and following). • Allowing hospitals to subcontract work involving home made (“in house”) medical devices (Bill, Articles 20 and following). • Allowing non-compliant medical devices on the market (Bill, Article 25). • Creating an export control system that applies to both essential and critical, Covid-19 related, medicines and raw materials (Bill, Article 26). The Bill lists several requirements to make the new regime unassailable under the EU free movement of goods rules. • Making it possible for the Minister responsible for public health or his representative to interfere with the supply chain in various ways by (i) limiting patient supplies; (ii) reducing pharmacy supplies; (iii) favouring supplies to hospital pharmacies; (iv) redistributing existing stocks; (v) allowing hospital pharmacies to redistribute stocks; (vi) regulating the distribution of Covid-19 vaccines; and (vii) directing the sale of wholesaler stocks (Bill, Article 27). At the request of the federal government, the Chamber will review the Bill on an expedited basis. As a result, the Chamber’s Committee for Health and Equal Opportunities has already begun discussing the Bill on Tuesday 27 April 2021 in hopes of having a vote still this week.

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    • 22/04/2021
    • Newsletters

    VBB on Belgian Business Law, Volume 2021, No. 3

    The March 2021 issue of our Belgian Business Law newsletter reporting on the latest developments in a range of areas, including competition, data protection, intellectual property and labour law.

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    • 22/04/2021
    • Articles

    EU Clinical Trial Portal and EU Database Declared Functional by EMA Board - EU Clinical Trials Regulation Expected to Take Effect on 31 January 2022

    Yesterday, the European Medicines Agency’s Management Board (the EMA Board) confirmed that an independent audit by KPMG has found that the EU Clinical Trial Portal and EU Database are fully functional (see, attached press release). This confirmation, which has been delayed for years due to technical difficulties with the development of the Portal’s and Database’s underlying IT systems, finally paves the way for the EU Clinical Trials Regulation (i.e., Regulation (EU) No 536/2014 of 16 April 2014; the CTR) to take effect on 31 January 2022. The CTR was initially scheduled to become operational in October 2018. In line with Article 82 CTR, the EMA Board will inform the European Commission (the Commission) of its findings. Provided the Commission is satisfied that the EU portal and the EU database are fully functional and meet all functional specifications, it will publish a notice to that effect in the EU Official Journal. The CTR will take effect six months after the publication of the notice (Article 99 CTR). Accordingly, for the CTR to go live by 31 January 2022, as seems to be the shared desire of the EMA Board, EMA and the Commission, the notice should be published on 31 July 2021. Once operational, the EU portal will serve as the single entry point for the submission of clinical trial applications, clinical trial-related information and for all communications by and between clinical trial sponsors and Member State authorities. The EU Database will store all data and information submitted through the EU Portal and, subject to limited exceptions, will be made publicly available.

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    • 22/04/2021
    • Articles

    European Commission Will Review Illumina-Grail Transaction Even Though EU and National Turnover Thresholds Are Not Reached

    In a controversial move, the European Commission (the Commission) announced on 20 April 2021 that it would review the proposed acquisition of cancer detection test start-up Grail by genomics firm Illumina, both of the US (see, attached press release). The Commission acted on a request of France, which was backed by three further EU Member States (Belgium, Greece and The Netherlands) as well as EEA countries Iceland and Norway, under powers conferred to it by Article 22 of the EU Merger Control Regulation (Article 22). Article 22 allows the Commission to review proposed acquisitions and mergers that would normally escape its jurisdiction because the transactions do not satisfy the turnover thresholds specified by the EU Merger Regulation. The two conditions for the application of Article 22 are that the transaction at issue should (i) affect trade between Member States; and (ii) threaten to have a significant impact on competition within the territory of the countries seeking the Commission’s help. Over the years, the Commission has handled a number of such transactions. However, the Illumina-Grail deal not only does not meet the turnover requirements of the EU Merger Control Regulation, but also remains under the radar of national merger review regimes and would therefore normally have been able to be consummated without being subjected to any competition scrutiny in Europe. For the Commission, the Illumina-Grail transaction offered the perfect opportunity to put into practice its recent Article 22 guidance which seeks to exercise control over acquisitions and mergers which involve firms that play a significant competitive role but generate little or no turnover at the moment of the transaction. According to the Commission, this is a trend that has gained particular traction in the digital economy and the pharmaceutical industry “where innovation is an important parameter of competition”, even if the companies involved “have not yet finalised, let alone exploited commercially, the results of their innovation activities”. The Commission expressed the concern that the combination of Illumina and Grail might, following the transaction, “restrict access to or increase prices of next generation sequencers and reagents to the detriment of the competitors of Grail active in genomic cancer tests”. The Commission’s fears were echoed by the French Autorité de la concurrence and by the Dutch Autoriteit Consument en Markt whose chairman pointed out that, even though Grail is a small company without turnover, Illumina is prepared to pay more than USD 7 billion for the company. By contrast, other national competition authorities took the position that they should not become involved by requesting the Commission’s assistance, because the transaction did not meet the turnover thresholds of their own jurisdiction. Illumina went to court in both France and The Netherlands in an attempt to block the referral to the Commission, but failed. It will now be required to notify its proposed acquisition to the Commission and is precluded from implementing the transaction, pending the Commission’s review. Pharmaceutical firms bent on acquiring a highly innovative player in the sector are reminded of an added layer of complexity in Europe, even if the target is small and its acquisition does not satisfy the EU and national merger control thresholds.

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    • 21/04/2021
    • Articles

    Belgium - New Royal Decree Gives Federal Government Special Temporary Powers to Tackle Medicine Shortages

    The Belgian Official Journal of 19 April 2021 contains a Royal Decree of 8 April 2021 “providing special measures to combat shortages of medicines in the framework of the SARS-CoV-2 pandemic” (the Royal Decree) (see, attachment). The Royal Decree confers on the federal Minister responsible for public health and the Administrator General of the Federal Agency for Medicines and Health Products the power to take a range of measures to ensure the adequate distribution of and access to medicines in the face of the Covid-19 pandemic. The Royal Decree is a stopgap to cover for the period between the expiry on 31 March 2021 of the previous, more wide-ranging Royal Decree of 24 March 2020 (see, Van Bael & Bellis Life Sciences News Alert of 26 March 2020) and the expected adoption of an emergency medicines law by the federal Parliament in May or June 2021 which will offer the federal government broader special powers to tackle medicine shortages, irrespective of the nature and origin of the health crisis. The measures taken on the basis of the Royal Decree cannot last longer than renewable periods of one month, subject to a total of 12 months. The Royal Decree will expire on 30 June 2021.

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    • 20/04/2021
    • News

    Isabelle Van Damme speaks on panel at the Forum on Procedural Law of the Court of Justice of the European Union Third Edition

    On 19 April 2021, Van Bael & Bellis partner Isabelle Van Damme participated in a panel at the Forum on Procedural Law of the Court of Justice of the European Union Third Edition (Online), organised by the Max Planck Institute Luxembourg for Procedural Law. The topic of Isabelle’s presentation was the Grand Chamber judgment of the Court of Justice in Case C-457/18 Slovenia v Croatia. In that judgment, the Court declared inadmissible an action brought by Slovenia against Croatia, against the background of Croatia’s refusal to accept a final arbitral award resolving a maritime and land border dispute between Croatia and Slovenia. Further details on the Forum can be accessed here.

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