Though the first nanoparticulate drug formulation was approved by the US FDA way back in 1995, a recent flurry of deals and product approvals have shown increasingly high valuations for nanomedicine companies.

As with any hot technology area, investors should carefully consider the patent landscape before plunging in. Patent activity in nanomedicine has grown exponentially in the last decade. Performing a freedom to operate search is an important step in the diligence process when considering an investment in nanomedicine. Although a given company may be focused on improving one specific drug, it is important to consider that others may have obtained patents on formulation technology that is not drug-specific which could present infringement risks. So searches should not be limited to just the particular drug of the product under development.

Nanomedicine often involves combinations of known ingredients to create improved pharmaceuticals that have different biological effects based on smaller dimensions, such as improved solubility, or they may be “smart” drug formulations designed to specifically target just a diseased area of the body, while leaving healthy tissue alone. This means it is important to consider individual components and the extent to which they may be separately patented.

In the US, certain research activities that need to be performed for FDA approval may be protected from patent infringement under the “safe harbor” of 35 U.S.C. 271(e), but once a new drug application is filed or approval becomes imminent, it is possible that an infringement action could be filed. Performing patent diligence as early as possible will help to avoid an unpleasant surprise during regulatory approval and before heavy investments are made in clinical trials.