Due Dilligence for post-approval acquisition candidate

Background

The Commercial Analysis team of a large hedge fund that invests in post-approval product opportunities sought to fully understand the revenue sustainability of a $90MM hospital product. The opportunity covered all geographies outside the U.S., and was being purchased from a major pharmaceutical organization that had already divested the U.S. rights several years previously. The client commissioned bioStrategies to conduct a commercial evaluation and to develop a forecast covering the remaining patent life of the product.

Analysis

bioStrategies deployed a team of six consultants to efficiently and comprehensively cover the issues in commercial due diligence. These included the following key issues:

* Understanding historic clinician perceptions and prospective usage levels in the context of rapidly evolving product and clinical data sets
* Assessing formulary and contract issues in the E.U. countries
* Explaining why the U.S. demise of the product under study was not going to be replicated in the ex-U.S. geographies
* Understanding the myriad clinical studies governing use across the five key products in this category
* Explaining why a key competitor would not duplicate the significant success they had experienced in the U.S. in the ex-U.S. geographies
* Developing a forecast across the diverse geographies and incorporating all the issues from the analysis.

Result

In less than one month, we presented our analysis to hedge fund management (both debt and equity groups), to the acquiring company, and to additional investors as the hedge fund sought to syndicate the investment. While our forecast was lower than the prevailing view, it nevertheless supported the investment. Each of the organizations accepted our analysis, and in fact invested in the opportunity.