Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Insolvency definition

What does Insolvency mean? In practice, insolvency describes a financial state where a debtor cannot meet liabilities when due, triggering remedies such as administration, liquidation or bankruptcy and informing directors’ duties and avoidance claims. For companies in England & Wales, Scotland and Northern Ireland, the Insolvency Act 1986, s 123 sets two alternative tests: - Cash‑flow insolvency: an inability to pay debts as they fall due. The inquiry is practical and forward‑looking, not confined to today’s bills (Re Patrick & Lyon Ltd [1933] Ch 786; BNY Corporate Trustee Services Ltd v Eurosail [2013] UKSC 28). - Balance‑sheet insolvency: liabilities (including contingent and prospective liabilities) exceed assets on...

UK Life Sciences Insolvency: A Practitioner's Guide to IP Licence Survival, CIGA Ipso Facto, Regulatory Issues and Supply Chain Risk

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

The life sciences industry

Comprises a broad constellation of stakeholders, spanning small University spin‑out biotechs built around a single discovery and research team through to vast, global ‘Big Pharma’ firms commercialising and promoting blockbuster medicines across multiple markets. Across that continuum sit, among others, contract research organisations, contract manufacturing organisations, specialist logistics and distribution providers, wholesale and retail pharmacies, and, increasingly, technology and AI businesses offering support and capability. Countless enterprises contribute to the life cycle of a pharmaceutical product—a journey frequently laden with hazards and uncertainty, and one that is operationally complex for most organisations at every step for participants overall. Bringing a medicinal product to market is thought to take 12 to 15 years, with a significant likelihood of failure; only a minute fraction of candidates entering pre‑clinical studies will secure regulatory clearance for use in people over that path over time. Beyond the extraordinarily high costs of launch, the sector faces mounting price pressures from industry ‘payers’, who require evidence not only of safety and efficacy but also of strong value for money via outcome‑based pricing models to be demonstrated clearly. Companies are, moreover, still contending with patent expiries across the sector at large today and beyond...

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Web page updated on 22/05/2026

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