Martin Gomez Shares Legal Roadmap for U.S. Market Entry at MedTech Malta 2024

As MedTech companies around the world set their sights on expanding into the U.S. market, understanding the complex legal landscape is crucial for long-term success. During MedTech Malta 2024, Martin Gomez, Partner at Goodwin, shed light on the key legal considerations MedTech companies should be aware of when partnering with U.S. law firms, emphasizing how expertise, industry knowledge, and strategic legal guidance can pave the way for successful market entry and growth.

Goodwin is a global law firm with a vast network of over 2,000 lawyers spanning offices across Europe and the U.S. The firm has extensive experience representing MedTech companies at various stages of their growth. From company formation and venture capital financing to mergers and acquisitions (M&A), regulatory affairs, and intellectual property (IP) protection, Goodwin offers comprehensive legal services that cater to the diverse needs of MedTech companies. Their track record speaks volumes, consistently ranking at the top of the legal rankings due to their successful handling of thousands of deals, investments, and transactions in the sector.

Expertise and Industry Knowledge

One of the first strategies Gomez recommends when selecting a U.S. law firm is to partner with a firm that has deep expertise in the MedTech industry. While founders or operators of MedTech startups may have experience with a limited number of transactions, they need a law firm that can provide guidance through complex deals with the wisdom accumulated from handling numerous similar situations.

A law firm with a strong track record in MedTech and the ability to bring that experience to the table is invaluable. Gomez highlights Goodwin’s consistent involvement in a wide array of transactions, including venture capital financings, strategic collaborations, and IPOs, underscoring their capacity to support MedTech companies through all stages of their journey. The goal is to have a law firm that is not just a legal advisor but a true partner in navigating the complexities of U.S. market entry and growth.

Guidance Through All Stages of Growth

As MedTech companies grow, their legal needs evolve. One of the critical considerations when partnering with a law firm is their ability to support the company throughout its entire lifecycle. In many cases, issues that arise in later-stage transactions or deals were seeded years earlier when the company was in its early stages, possibly working with less experienced legal counsel.

According to Gomez, it is essential to choose a law firm that understands how to structure deals from the outset, ensuring that the company’s legal framework can evolve as the business grows. Whether it’s pricing services appropriately for early-stage startups or offering sophisticated legal guidance as the company enters more significant transactions, the right law firm will be able to scale with the business and provide continuous support.

The Importance of an Interdisciplinary Team

MedTech companies operate at the intersection of many legal disciplines, from regulatory concerns to IP protection and corporate governance. An interdisciplinary legal team is essential to navigating the various legal challenges that arise as the business grows. Gomez emphasizes the importance of having a legal team that can address these issues in an integrated way, as each area often informs the others. For example, regulatory strategy can impact IP strategy, while IP considerations are crucial in structuring mergers or collaborations.

In addition, cross-border experience is particularly important for international companies entering the U.S. market. A firm with offices in both the U.S. and Europe, as well as a solid understanding of international markets, can help MedTech companies navigate the regulatory and legal challenges of entering the U.S. from abroad.

Corporate Structure: U.S. Subsidiary or U.S. Flip?

A key legal decision for MedTech companies expanding into the U.S. is choosing the appropriate corporate structure. According to Gomez, companies often face a choice between setting up a U.S. subsidiary or executing a “U.S. flip” – a process in which the ownership structure of the foreign company is altered so that U.S. equity holders are involved.

Each option has its legal and tax implications. A U.S. subsidiary is often the simpler option, though it requires proper governance, intercompany agreements, and other legal actions to ensure the smooth operation of the subsidiary. On the other hand, a U.S. flip involves more complex legal steps, including the exchange of foreign shares for U.S. equity, and requires careful consideration of tax efficiency to avoid adverse consequences for foreign equity holders.

In both cases, having legal guidance from a firm with experience in U.S. corporate law is critical to ensure that the process is handled correctly and that the company is set up for success.

Regulatory and IP Considerations

When entering the U.S. market, regulatory compliance is another significant consideration. Gomez advises working with a law firm that understands the intricate FDA regulatory landscape and can guide companies through the process efficiently. Having legal experts who can help MedTech companies navigate these regulatory challenges, in conjunction with regulatory consultants, is key to ensuring that products are compliant with U.S. standards.

Intellectual property is equally important. Gomez points out that U.S. investors and acquirers often place a high value on a company’s IP portfolio, and the legal framework for IP protection in the U.S. differs from Europe. For example, in the U.S., patent protection can extend to methods of treatment, unlike in Europe, where such claims are prohibited. Understanding these nuances and having the right IP strategy in place is crucial when pursuing funding, acquisitions, or other business opportunities in the U.S.

A Partner, Not Just a Legal Advisor

Finally, Gomez stresses that U.S. law firms should not be seen merely as providers of legal services but as strategic collaborators. A strong U.S. law firm can offer more than just legal advice; they can provide valuable connections to venture capitalists, assist with pricing strategies, and help navigate networking opportunities to fuel a company’s growth.

MedTech companies looking to expand into the U.S. market need to carefully select their legal partners to ensure long-term success. With the right expertise, guidance, and collaboration, the U.S. market offers significant opportunities for growth and innovation.

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