Pharmaceutical and biotech companies, strategic partnering divisions of contract research organizations (CROs) and investment firms are entering into alliances and joint ventures at an ever-increasing pace. As the incidence of these product-based investing transactions increases, so does the number of hours and resources needed to conduct due diligence. In an effort to trim escalating due diligence costs and reduce transaction time, companies are increasingly using electronic databases and virtual data rooms (VDRs) to allow access to confidential information simultaneously by multiple users and to permit central version control.

This article discusses why these virtual tools are gaining popularity and explains some of the reasons they cannot deliver the complete answer to streamlining the product partnering and investment due diligence process.

Regulatory Focus 13:43-45, 2008