Valuations
- For a biotech company engaged in licensing discussions with a number of major pharmaceutical companies, Alacrita developed rNPV valuations for each program. This 'theoretical' valuation incorporated monte carlo simulations to reveal key areas of uncertainty within the model, focussing the direction of future market research. We also developed a ‘realistic’ valuation, which considered the type of valuation and deal construct that the buyer/licensee may think appropriate given real world valuations, precedents and their presumed view of the world. These valuations proved pivotal for the Management and Board of Directors in setting internal expectations and guiding the negotiation strategy.
- Alacrita provided high level support for a licensor of a marketed oncology drug looking to monetise its royalty stream. Alacrita developed a multi-year forecast of future sales with consideration of the strength of patent protection, significance of non-patent protection, competitor landscape and future market threats and opportunities. Using the model, Alacrita set out future royalty streams and their present values based on a number of different scenarios.
- For a division of a multinational pharmaceutical company, Alacrita evaluated a pipeline agreement with a platform technology company. The over-riding question was "What is the overall value of this partnership?" Alacrita assessed the commercial potential of the opportunity, and provided a critical analysis of the rNPV model in use by the negotiation team. Alacrita thoroughly probed and tested the underlying assumptions using real world data incorporated into a Monte Carlo simulation model. The approach provided greater insight into the impact of the underlying uncertainties, allowing the key outputs (e.g. NPV) to be expressed as a range, with confidence intervals, rather than a single number. In addition, Alacrita reviewed a relevant selection of early-stage biotechnology deals to generate a comparables analysis. This allowed the deal to be bencharked against analogous transactions, also serving as a useful cross-check of the rNPV analysis. Alacrita helped the in-house team build the case for the deal at board level, emphasing the value of the strategic logic of the deal and setting out the non-financial drivers of the opportunity.
- Alacrita supported a biotech company actively engaged in a partnering process with several major pharmaceutical companies. The lead partner had set out aggressive timelines, another pharma company was validating the technology in house, a third was assessing confidential clinical data and a fourth was entering confidentiality. To secure maximum negotiating leverage, Alacrita supported the company with robust valuation models and key lines of argument and rebuttal to be used in term sheet discussions and subsequent negotiations.
Partnering preparation
For a clinical stage, Type I diabetes immunotherapy project, Alacrita developed hard hitting partnering materials and advised on dataroom structure and due diligence preparations. We recast how the story was presented, highlighting the mechanism-based approach to treating/preventing Type I diabetes and the scientific rationale of the approach being taken. The presentation was formatted in a professional, consistent style and encompassed scientific rationale, clinical data accumulated to date, supporting preclinical data, benchmarking against other competing therapies, intellectual property and future product development strategy.
Search and assessment: Oncology
Alacrita provided hands-on support to a listed North American company on the identification, assessment and in-licensing of early stage oncology assets. Alacrita leveraged its industry network and contacts to identify a number of high quality opportunities that had not yet been identified by the clientss in house business development team. Alacrita worked closely with the clients scientific staff to screen and assess opportunities prior to entering heads of terms,then provided advice on structuring heads of terms, subsequent due diligence and licence negotiations.
Search and assessment: Stem Cells
For a listed North American firm looking to in-license or acquire early stage regenerative medicine programs, Alacrita conducted a search for late stage academic or seed/early stage commercial programs, introducing the client to a number of opportunities that were not widely known or in commercial licensing databases.