Legal and business considerations for biotechnology founders building companies in New York.
Building a biotechnology company in New York involves more than advancing scientific research. Founders must also make decisions about hiring, laboratory facilities, state incentives and commercial agreements that can affect how much capital their companies need and how quickly they can grow.
New York offers access to major research institutions, investors, hospitals and a growing life-sciences community. From Manhattan's research corridors to emerging biotechnology companies in Brooklyn and West Harlem, founders have opportunities to develop new technologies and establish businesses. They also face legal and financial decisions that deserve attention early.
At Lanton, Lanton & Sosa Law, we prepared the New York Life Sciences Founders Brief to examine four areas that can affect a company's growth: employment, commercial real estate, regulatory policy and transactions.
People: Hiring and Managing a Growing Team
Recruiting scientists and expanding a research team introduces employment responsibilities that founders should understand before making their next hire.
New York has specific requirements involving pay transparency, employee invention agreements and paid prenatal leave. For biotechnology companies, properly documenting employment relationships and intellectual property ownership is especially important when preparing for financing or licensing discussions.
Space: Laboratory Leasing and Regulatory Requirements
Laboratory space can become one of a biotechnology company's largest financial commitments.
In New York City, founders must consider more than rent and construction costs. Laboratory operations may require FDNY permits, appropriate supervision and compliance with rules governing hazardous materials.
Lease provisions involving improvements, equipment, expansion rights and early termination can also affect a company's ability to respond when its financing or research plans change.
Policy: State Incentives and Commercial Planning
New York offers a life-sciences research and development tax credit for eligible businesses. However, qualification requirements, annual applications and limits on eligible expenses can affect how much assistance a company may actually receive.
Founders must also consider how pharmaceutical pricing, reimbursement and regulatory policy could affect the future commercial value of their products.
These considerations can become important long before a company files its first application for regulatory approval.
Transactions: Preparing for Financing and Partnerships
A successful financing, licensing agreement or acquisition often depends on decisions made years earlier.
Investors and prospective partners may examine intellectual property ownership, university licensing agreements, employment contracts, laboratory leases and regulatory obligations before completing a transaction.
Addressing those issues early can help companies prepare for due diligence and avoid delays when an opportunity arises.
Read the Founders Brief
Our New York Life Sciences Founders Brief examines these issues in greater detail, with New York-specific examples and questions founders can bring to their management teams and advisers.
Download our New York Founder Brief here.
Lanton, Lanton & Sosa Law advises biotechnology and life-sciences companies on employment matters, commercial real estate, healthcare regulation and business transactions.
If your company is preparing to expand, raise capital, negotiate a laboratory lease or enter a licensing agreement, contact our team to discuss your legal needs.
This publication is for informational purposes and does not constitute legal advice.