Challenge:
Alacrita was engaged due diligence and valuation support by a listed clinical stage biotechnology company. The biotech needed to benchmark the technical strengths and weaknesses of two pipeline products relative to competition and to establish a valuation trajectory for both products at typical value-inflection points. We were also asked to consider how continued internal development may affect shareholder value compared to out-licensing, co-development or spin-out of each product.
Solution:
Alacrita conducted a high level due diligence of the two projects covering:
- Scientific rationale and preclinical proof-of-concept dataset;
- Preclinical development package;
- Manufacturing/CMC approach for clinical trials and beyond;
- Competitive position vs current and pipeline products;
- Key risks (safety/tox, clinical, regulatory, manufacturing, market, etc.).
We then benchmarked the two products against competitive technologies, exploring:
- Existing treatment pathways and related medical and clinical practice;
- The strength of pre-clinical/clinical data on key identified competitor programs;
- The client's proprietary IP (filed and unfiled) to identify its distinctive value in comparison with competing technologies;
- The underlying assumptions within the products’ draft target product profiles (TPPs);
- The potential positioning of both programs relative to forecast competition at launch.
This fed through into a Monte Carlo rNPV analysis where we assessed the value at key milestones (e.g. initiation of pivotal trials, submission for approval, etc). Finally, we benchmarked the valuations against partnering and M&A comparables enabling us to develop recommendations for maximizing shareholder value.
Alacrita's due diligence services
Since our inception over a decade ago, we've conducted more than 200 major due diligence assignments, covering a wide range of life science companies, programs and therapeutics. There are few firms that can match the level of our expertise, which is bolstered by our ability to draw in expert consultants with specialized knowledge in the core area of each project we work on.