On May 23, 2025, Brian Koosed, Emily Seiderman West, and Stephanie Diu published, “Milestone Payments: Potential Trouble In The Last Mile?” in Life Science Leader. The following is an excerpt:
Earnouts have been a part of M&A for decades, with pharmaceutical M&A transactions in particular relying on them. These earnout provisions are typically referred to as “milestone payments” because they are tied to the achievement of certain “milestones” in the drug development process, such as successful clinical trials or regulatory approvals. And they almost universally depend on one thing: a predictable regulatory approval process from the FDA, on a fairly predictable timeline. Indeed, some of the FDA’s timing is required by law; for example, under 21 C.F.R. § 314.100, FDA must, with certain exceptions, review and respond to generic drug applications (ANDAs) within 180 days.
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