An emerging biopharma company was actively seeking assets to diversify its pipeline and mitigate risk from its sole late-stage asset. The chief commercial officer and head of business development identified a late-stage rare disease asset—while low risk (the MoA is validated), the degree of competitive advantage and ability to differentiate from existing therapy was unclear.
The client initiated discussions and negotiations with the manufacturer and required an independent external assessment of the opportunity and, if favorable, a model to evaluate the asset’s value and potential deal terms.
BMI Approach
BMI proposed a gated approach—first evaluating the market opportunity at a high level, based on primary research with top-tier KOLs, along with extensive secondary research. Next, if the opportunity were favorable, based on the high-level assessment, BMI would conduct more in-depth due diligence with a wider range of potential product prescribers, patients, and a small sample of managed care decision-makers (pharmacy directors with P&T responsibility). Finally, if the opportunity passed the more in-depth due diligence test, BMI would build a market model, to include an assessment of risk-adjusted NPV (rNPV) under different deal scenarios.
BMI had 6 to 8 weeks to complete the evaluation and rNPV market model.
Deliverables
BMI worked closely with the client in an iterative process. Based on extensive use of secondary sources, and very targeted KOL interviews, BMI was able to provide a characterization of the disease epidemiology, current treatment practices and trends, outcomes and unmet needs, the development pathway, the benchmarks for new therapeutics, and associated target product profile (TPP) for success, the competitive pipeline and threats, and a high-level estimate of market potential.
The project proceeded to the second phase—in-depth diligence to include a wider audience of decision-makers. BMI identified a range of high-treaters based on screening clinicians treating the disease of interest. We refined the product profile, and, in addition to clinicians, tested the profile with a select group of patients already using a competitive product, to understand patient interest, potential adoption and the degree of differentiation. BMI interviewed several pharmacy directors from leading managed care organizations to understand how the new product would be evaluated for formulary inclusion, how the product would be managed, and an acceptable pricing range. BMI conducted extensive secondary research, including identifying and characterizing potential comparables (“comps”) to better understand potential pricing, access, and adoption, as well as development and marketing costs, and likelihood of success.
Finally, based on continued interest, BMI built a flexible Excel-based market and rNPV model that allowed the client to estimate potential revenue under different clinical development scenarios, as well as costs and deal terms.
The client passed on the opportunity, due to significant competition, but has continued to use BMI as its favored partner for diligence of new licensing and M&A opportunities.
