Buy the asset, inherit the obligations: put trial readiness into deal diligence

A pipeline built by deal, a trial run by the sponsor

Processa Pharmaceuticals had a busy end to October. The US company won FDA IND clearance for a Phase 2 study of VT-7208, an oral BTK inhibitor, in urticaria. It signed an option deal with Generian for an oral FcRn antagonist. It also appointed Sheila Gujrathi as Executive Chair after acquiring Vidya Therapeutics. I draw no conclusion about Processa's readiness, and the records give no basis for one. But the pattern is worth examining because it is increasingly common: assets arrive through transactions, and the regulatory and operational duties arrive with them.

My position is that clinical operations and regulatory leads should have a formal seat in deal diligence. An IND clearance is a regulatory milestone. It does not show that the sponsor can run the trial the clearance permits.

The obligations don't transfer to a CRO

Whatever the deal structure, the sponsor remains accountable for the trial. That is a settled principle, not a new one. Two other items in this week's records show where that accountability bites.

First, the EMA has published a notice to sponsors on validating and qualifying computerised systems used in clinical trials. The details are not set out in the information available to us, so I won't characterise its requirements. But the addressee is clear: sponsors. A newly assembled pipeline brings a new mix of vendors, data platforms and inherited study documentation, and the sponsor has to account for all of it.

Second, Health Canada lists a Type II recall of several Philips Azurion 7 configurations. Surge voltages during start or restart can disable internal power supplies and leave systems unusable. Nothing in the record links this to any trial. It is a reminder that trials depend on equipment sponsors do not control, and that a dependency nobody mapped is a risk nobody owns.

The strongest counter-argument

The best objection is that diligence is already crowded. Option deals in particular are designed to be cheap and reversible. Buying the right to an asset is not the same as running its trial, and asking operations teams to audit every candidate before an option is exercised would slow transactions and burn scarce resources. Small companies also lean on experienced CROs and advisers for exactly this reason.

There is truth in that. Operational diligence should be proportionate, and an option is not a commitment. But the objection proves less than it appears to. Proportionate does not mean absent. A short readiness review before an option is exercised costs little against discovering, mid-programme, that no one has mapped which systems hold the data, who validates them, or which site-level equipment a protocol relies on. Outsourcing the work does not outsource the accountability, so the sponsor still needs enough in-house understanding to oversee the vendors it hires.

What a readiness review should cover

It need not be elaborate. Before exercising an option or closing an acquisition, ask who the sponsor of record will be, and whether the team can describe the computerised systems the trial will use and the basis on which they will be validated. Ask which site equipment the protocol depends on and what the contingency is if it fails. Ask what regulatory history, including FDA correspondence behind an IND, transfers with the asset and who is responsible for it.

None of this requires knowing what the EMA notice says in detail. It requires knowing where your own gaps are, so that when the detail is read, you are checking it against a map rather than starting from scratch.