Biotech Mergers and Divestitures IT Challenges & 5 Critical Strategies for Success
There’s a lot of turmoil in the biotech industry right now. Venture Capital investment and the public market (IPOs) have both slowed dramatically. This has spurred an increase in mergers, acquisitions, and divestitures, specifically big pharma targeting clinical-stage companies with promising assets. But while the headlines tend to focus on the science or financials, behind the scenes, there’s another major piece that makes or breaks these transitions: IT.
And I’m here to tell you, it’s never as easy as it looks on paper. As we guide clients through this transition, I often share that, “You need five facilities guys to run a building, but a few hundred to build one.” That same logic applies to IT. Supporting a stable environment and building one from scratch, integrating two environments into one, or even just separating and dividing compliant data, are all completely different beasts. Biotech mergers, acquisitions, and especially divestitures are some of the most labor-intensive, high-stakes projects an IT team can face. Let’s dive into the challenges, and I’ll share some advice on how to streamline the process.
Why Biotech Mergers and Divestitures Are So Tough on IT
Let’s start with the basics. Whether you're integrating a newly acquired company or separating a division, the entire IT environment is in play, everything from email, data, servers, applications, security controls, user access, compliance tooling, and more.
But what’s one of the hardest parts of a biotech merger or divestiture? It’s often your IT, cloud, and environment migrations. According to Barclays' 2024 CIO survey, 83% of organizations surveyed plan to shift some workloads from public cloud to private/on-prem, so this will be a widespread issue. These migrations are disruptive if not handled carefully. Whether you’re shifting a team to a new Microsoft 365 tenant, migrating lab groups off GSuite, or splitting massive Egnyte data repositories, these transitions impact the tools people rely on every day.
And it’s never just about moving files. You’re moving the entire operating environment—permissions, data structures, workflows, and integrations with other platforms. In biotech, that often means lab data tied to identity platforms, compliance tools embedded in file systems, or tightly coupled collaboration environments between research, clinical, and regulatory teams.
It’s an interconnected web, and to move it successfully, you need people who’ve been there before and know what works and what doesn’t. This type of guidance can make or break your project. When you have people who know the risks, have playbooks for common pitfalls, and can guide both the business and IT teams through the hundreds of projects and tough calls that have to be made quickly to stay on schedule.
And it’s not just these migrations that make biotech mergers, acquisitions, or divestitures IT projects difficult. Here are a few other common challenges we see all the time during biotech mergers and acquisitions:
Compressed Timelines: You’re often asked to build or integrate an enterprise-grade environment in a matter of months. That includes infrastructure, networking, licensing, compliance controls, and data systems.
Maintaining Compliance: Biotech companies operate under strict regulatory frameworks (GxP, HIPAA, FDA, CLIA, etc.). Every move must be carefully secured, documented, and validated, especially when sensitive data is involved.
Minimal Downtime: Whether you’re divesting or merging, core operations like research, clinical development, and supply chain must continue uninterrupted.
Limited In-House Capacity: Most internal teams are already stretched thin running day-to-day operations. Suddenly asking them to plan and execute a biotech merger or divestiture of IT functions is like asking your rideshare driver to build the car while still driving it.
Most internal IT teams don’t have this experience and don’t know what they don’t know. In these complicated situations, there really is no substitute for biotech IT specialists, who have both biotech experience AND MA&D IT expertise.
Case Study: Divesting a Biotech Division & Starting Up a New Organization From Scratch
One of our recent engagements shows just how intense these projects can be. One of our clients, a leading life sciences company, had to split off a division and create a new company. The catch? They had to do it in under a year, without disrupting daily operations.
That meant:
Standing up a brand-new Microsoft environment (Azure, Office 365, Teams)
Building servers and network infrastructure from scratch
Dividing massive data repositories between two entities
Supporting users in both environments
Staying compliant with biotech regulations
And completing over 100 IT projects in a year
We supported the client by providing both strategy and execution. We set up the infrastructure, managed the data separation, and hit every milestone along the way. Here’s what they had to say after the launch: “Within less than a year, we spun up an entirely new company and completed 100 IT projects—that’s more projects than we did in the previous 10 years. Pennant helped with pretty much everything from start to finish. They hit every milestone, and we had a very successful launch!” Please read the full case study for more details.
Keys to Success in Biotech Mergers, Acquisitions, and Divestitures
Our team has handled the IT transition for many biotech mergers, acquisitions, and divestitures, and here are a few strategic recommendations:
Start Planning Early. Even informal discussions should trigger an early IT assessment. It’s never too soon to sketch out potential data, identity, and compliance impacts.
Define the “Day 1” Environment. Whether you’re creating a new org or integrating one, everyone needs to agree on what must be up and running on Day 1. That’s your starting line.
Get Outside Help. Don’t expect your internal team to execute this project on their own. Look for consultants (like our Pennant team – read more about our MA&D services here) who specialize in IT work for biotech mergers, acquisitions, and divestitures, so we can guide you through each step of the process.
Document Everything. Audit trails, compliance checklists, and validation plans aren’t optional. They’re essential for regulatory and legal defense later on.
Keep Users in the Loop. Tenant moves and app transitions are highly visible. Communicate clearly, train proactively, and support heavily on go-live days.
Guiding Your IT Transition During Biotech Mergers, Acquisitions & Divestitures
Whether you’re blending systems after an acquisition or separating infrastructure during a divestiture, our Pennant biotech IT experts handle the heavy lifting to ensure you meet your deadlines.
We offer:
Rapid Microsoft Environment Standups
Network and Security Deployment from Scratch
Data Acquisition and Separation Services
Platform Integration (ERP, CRM, etc.)
Cybersecurity Audits and Alignment
Proven Playbooks, Hands-On Expertise, and more
But the real value isn’t just in our tools, it’s in our approach. We roll up our sleeves and work side-by-side with your team. We not only bring the technical knowledge, but also the communication skills and biotech experience that make complex biotech mergers and divestitures manageable.
As one of our clients put it: “Divestitures and data separation are not easy, but Pennant helped us streamline the process. We value the honesty, integrity, hard work, and in-depth knowledge Pennant provides, making them our go-to partner for future IT needs.”
Let’s Connect
If you’re navigating a biotech merger, acquisition, or divestiture, let’s talk. We’ve been there before, and we’re ready to help you get your IT transitioned on time and on budget. Contact us to learn more.