Case Study

Net Present Value: Assessing Opportunities for Indication Expansion

Posted on 08/03/2018

Our client, a European specialty pharmaceutical company, was considering an expansion of indications within its target therapeutic group via licensing and acquiring products that were in clinical development, soon-to-be-launched or already marketed. The client engaged Prescient to prepare a comprehensive commercial  valuation of a late-stage licensing opportunity to support the assessment of a go/no-go decision and subsequent submission of a non-binding offer, resulting in full due diligence or potential negotiation and closing of a deal or partnership.

Shaping Decisions | Driving Value
Prescient began the engagement by developing a detailed understanding of the disease area, addressable patient population and competitive landscape of all marketed and pipeline drugs. Prescient analyzed the scientific data and commercial capabilities of the target assets in comparison to available and pipeline treatment options. Findings were triangulated based on interviews with payers and KOLs to inform potential clinical use and pricing power. Insights gained on the market, clinical, regulatory and commercial parameters
were used to assess the target asset value, based on a risk-adjusted net present value (NPV) analysis. Further, scenario analysis was used to assess the sensitivity of the forecasts to key inputs such as market share and pricing.

The Prescient Advantage
Based on Prescient’s analysis and recommendations, the client was able to understand the market opportunity for the drug in development in the two targeted indications and make a go/no-go decision and submit a non-binding offer.

The client negotiated a potential partnership covering the US and EU5, by drawing on the independent NPV forecasts and assessment of asset value based on key opinion leader and payer perceptions. The client engaged Prescient for future detailed assessment of subsequent indication expansion within the therapeutic area.

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