Interview Oscar Alegre – Partner at DWF-RCD in the Innovation and Entrepreneurship Area, specialising in the Science and Technology Sector

Oscar Alegre: ” It is important to strengthen the dialogue between those who promote science and those who finance it “.

Oscar Alegre holds a law degree and a Master’s degree in Law from ISDE Law & Business School. He has worked for more than four years at the law firm Roca Junyent and for the last 16 years at DWF-RCD. Oscar Alegre has been recognised by the most prestigious international legal directories, such as Chambers and Partners, Legal 500, Leaders League and Best Lawyers in the Intellectual Property, Life Sciences, Public Law, Venture Capital and TMT practices. In the 2020 edition of Best Lawyers, Oscar was recognised as Lawyer of the Year in the Technology Law practice. He has also been highlighted as one of the most active legal advisors in the M&A and Private Equity market (TTR/Expansión).

At what point does RCD’s support for start-ups and spin-offs become more relevant than the activities in which it has traditionally been more involved, such as M&A of Big Pharma?

The firm was founded in 2003 with a strong entrepreneurial spirit and a great sensitivity towards innovation and entrepreneurship projects. In fact, we were the first law firm in Spain to have an area specialising in the knowledge economy, and we began to collaborate with all the players in the ecosystem, from research centres, universities and biomedical foundations to investors investing in this type of project.

This has given us a lot of information that has helped us to accompany biotechs throughout their life cycle, even before they were created. We help them in the process of technology transfer from the institutions, in negotiating with investors, and in their relationship with big pharma, often establishing co-development agreements, licensing agreements for the biotech’s products or the sale of the biotech.

The fact that we have worked with all the agents in the ecosystem, and have accompanied many companies along the way, helps us a lot to facilitate agreements

between them, and it is part of our natural role to help these processes to be carried out in an agile and constructive way, generating value for our clients and the entities with which we collaborate.

Is it often difficult to conclude licensing contracts between institutions and future spin-offs? Is there a lack of knowledge, both on the part of entrepreneurs and the institutions they come from, as to what the logical margins of negotiation are?

Traditionally, this has been complex, as the regulatory frameworks have not always been clear and, being a growing sector, there was not always adequate experience and knowledge to negotiate these contracts calmly. In many cases we are talking about the transfer of public assets, which must be treated with rigour and in accordance with the regulations in force. For this reason, there has always been a high level of protectionism of the public interest, and it has not always been easy to combine this with the interest of the project. However, for some time now, all the agents involved in this type of process have increased their knowledge of the matter, which allows them to decide with greater peace of mind and security, and to seek or accept proposals that help the process to succeed.

On the part of the entrepreneurs, they have more and more comparisons and experiences of other entrepreneurs that allow them to understand the contract proposals they receive. In any case, it is essential that they are well advised to understand what they are signing and what impact it will have on the company.

Do R&D collaboration agreements between different institutions (public-public or public-private) usually have the necessary legal rigour to avoid problems?

In this area, as in others, substantial improvements have been made over time on the basis of the experience acquired, which has enabled these agreements to be brought into line with international standards and applicable regulations. Currently, these institutions have extensive experience in agreements with national and international companies and entities for the development of research and innovation projects of all kinds, and generally with very favourable results that make our universities and centres highly valued by operators in the sector.

What are the most important changes in the new Start-up Law?

It has been both applauded for recognising the importance of this ecosystem in the economy and criticised for its lack of ambition: on the one hand because it falls short of the demands of many of the actors that make up the knowledge economy, and on the other hand because the deployment of the law is subject to future developments, which means delaying the solution of issues that are urgently needed now.

On the positive side of the balance, we can count on a much better tax regime that allows incentive schemes to be competitive and beneficiaries are not taxed until they actually receive a profit (albeit with perhaps excessively complex mechanisms), or the simplification of processes to encourage investment (elimination of the need to obtain a NIE for foreign investors). It also establishes an extension of the special regime for inpatriates from 5 to 10 years and the possibility of applying it to other members of the family unit.

On the other side of the scale, there is a widespread feeling of a missed opportunity to be more aggressive and forceful in favouring this entrepreneurial ecosystem. Certain aspects such as reductions in corporate tax with time restrictions such that very few start-ups can benefit from it, the non-regulation of the exit tax or the formalities for accreditation as start-ups, are elements that have been criticised by the majority of the ecosystem.

What about the new Science Law?

As was the case with the law on start-ups, the reform of the law on science is also a major necessity. We have excellent competence and quality in the work of scientists, comparable to other countries with more resources, but we still have limitations. We also have good offices for transferring the results of public research centres, as well as innovative initiatives that should make it easier for this research to reach the market. The Science Act was a necessary and essential step to promote transfer and entrepreneurship in the public research environment, which until then had been weighed down by legislation that was clearly outdated, and the reform makes an effort to integrate into a single law a regulation that is currently dispersed, but there is still room for improvement.

Thus, in the area of technology transfer, there are still elements that hinder the processes and deprive the centres and professionals involved of the freedom to carry out better transfer processes. I welcome the changes proposed with regard to the mechanisms for the mobility of research staff and the regulation of the transfer procedure by universities and research centres, but I believe that they can be further improved in order to eliminate some formal requirements and fully adapt this regulation to the reality and needs of entrepreneurs.

It is important that the dialogue between science promoters and science funders (investment funds, public institutions and other investors) is strengthened to facilitate transfer mechanisms while protecting the public interest.

When negotiating investment rounds, are there cultural differences in terms of investment models depending on the origin of the Venture Capitals (based in Spain or in other European or American countries, etc.)?

Nowadays there are international standards that are easily recognisable and accepted by all, which makes it much easier to close transactions regardless of the origin of the investor, especially in the case of European or North American investors. Obviously, there are differences because the Venture Capital sector has evolved differently in each country according to its local reality. The model investment contracts in the United States include specific documents to regulate the rights of investors in the context of an IPO. This is much less common in Spain, despite the fact that the origin of standard investment contracts in Spain is clearly Anglo-Saxon and we have imported their standard practices. Terms such as “preferred shares”, “Liquidation preference” or “reps and warrants” have become completely standard in Spain, and I would say in most of Europe. But there are always characteristic elements associated with the origin of the investment. For example, in Scandinavian countries it is common for investors themselves to differentiate between types of shares or preferential liquidation rights for investors at the expense of the founders.