Cleary’s Pharma Bites: Contingent Value Rights (CVRs) in Pharmaceutical Deals

November 1, 2021

Cleary Gottlieb’s Pharmaceutical, Biotech, and Healthcare group is pleased to present the latest installment of its “Pharma Bites” series: Contingent Value Rights (CVRs) in Pharmaceutical Deals.

What are Contingent Value Rights?

  • Contingent Value Rights (CVRs) are used to provide additional value to stockholders of a target company upon the occurrence of specified future events.
  • CVRs are used regularly in pharmaceutical and biotech deals.
  • CVRs bridge the “value gap” attributable to uncertain future events that could change the valuation of a target business, sometimes drastically.
  • Most often seen types of CVRs include:
    • Event-driven CVRs: payment triggered by a key event, often regulatory approvals for drugs, first commercial sale of a drug, etc.
    • Financial-driven CVRs: payment based on sales of the target, often sales of a particular drug or a specific business line.
    • Litigation CVRs: payment triggered by recovery (or sometimes absence of liability) from a key piece of litigation (e.g., a patent infringement suit).

To learn more about this topic and view the related slide deck, click here.

Cleary’s Pharma Bites series seeks to provide critical updates on a wide range of antitrust, regulatory, arbitration, and litigation issues in the pharmaceutical and biotechnology space. 

To learn more about Cleary’s Pharmaceuticals and Biotechnology practice, click here.