Paul Hastings, a leading global law firm, announced today that the firm represented Avalon Ventures, a San Diego-based venture capital fund, in its $495 million collaboration with global healthcare company GlaxoSmithKline (GSK) to fund and launch up to ten early-stage life sciences companies. While the technologies for the companies may come from anywhere in the world, the companies and their management and scientific teams will all be located in San Diego.

This collaborative approach to drug discovery and development between the venture capital community and big pharma potentially signals the beginning of a long-awaited paradigm shift as to how new drugs are discovered, developed and commercialized. Under the collaboration, Avalon Ventures will identify promising new technologies focusing on early-stage discovery across various therapy areas. A joint management committee of Avalon and GSK will then approve the formation of new companies based upon these technologies. Together, Avalon and GSK will finance these newly-established companies, with Avalon Ventures providing up to $30 million from its recently announced $200 million tenth fund and GSK providing research and development support and success-based preclinical and clinical milestones for up to a total of $465 million for the ten companies.

The Paul Hastings’ team worked side-by-side with the Avalon team to think through a host of novel issues and drafted and negotiated first-in-kind transaction documents to memorialize this new approach to drug discovery.

M&A partner Carl Sanchez and associate Scott Oross led the Paul Hastings team, which also included associate Laura McGurty, Private Equity partner Rob Carlson and Tax partner Tom Wisialowski. Paul Hastings also provided the legal representation to Avalon Ventures in its formation of Fund X.

www.paulhastings.com