Background and Scope
Sathguru performed a comprehensive techno-commercial due-diligence covering commercial, regulatory, IP and manufacturing aspects for a $130Mn funding transaction in an Indian bio-pharmaceutical company. The due-diligence covered all segments that the company was present in – vaccines, Indian domestic branded pharmaceuticals, RoW pharma exports and US generic formulations. As part of the diligence, we reviewed market, competitive landscape and commercial outlook for all the product categories, assessed anticipated market size for pipeline assets, commented on reasonability of the projections, analyzed drivers of risk and performed sensitivity analysis / developed revised scenarios for the business plan reflecting risk and opportunity levers identified.
Sathguru reviewed commercial opportunity, regulatory and manufacturing risk, Intellectual Property (IP) considerations as part of the scope of the comprehensive due-diligence project. Given the breadth of business engagement and multi-dimensional complexity in markets addressed, we leveraged in-house segment depth and also engaged in extensive primary research and secondary research to cover the following scope:
- Comprehensive commercial due diligence including review of market and competitive landscape for company’s pharma and vaccines portfolio to assess
- market outlook by product category / market segment
- impact of regulatory considerations on revenue projections
- pricing and profitability trends and impact on business plan
- reasonability of market share assumptions in Indian domestic pharma market, RoW pharma exports & regulated market exports (ANDA filings in US)
- In the case of vaccines portfolio, for commercial products, reviewed pricing trends in public health procurement for various products, assessed volume offtake likelihood based on funding commitment in public health, historical benchmarks for market penetration of various vaccines in private markets and finally assessed intrinsic risk and achievability of segment business plan
- For pipeline vaccines, assessed level of technology and validation risk, reviewed global scientific developments and implications for product pipeline, timeline to commercial launch based on regulatory stipulations and efficacy / immunogenicity data requirements, posturing of public health stakeholders on adoption/support for pipeline vaccines, market shaping likelihood in public and private markets
- For US ANDA pipeline: assessed terms of strategic marketing partnerships vs market benchmarks, intensity of competition, price erosion trends, timeline to approval for pipeline products, market share projections, approval risk and implications for segment revenue projections, revenue growth anticipated and overall segment business plan, regulatory approval and correspondence for facility validation by USFDA and business risk implications
- Indian domestic pharma market: Reviewed sales force effectiveness by therapeutic area, sales trend by brand and product category and evolving competitive landscape and brand share by molecule, overall market trends, price control or other pricing considerations and segment business plan
- Pharma RoW markets: reviewed revenue and CoGS assumptions by market, sales visibility, historical trends and reasonability of growth projections
- Business plan risk were analyzed based on both external as well as internal factors such as capacity of the facilities, audit approvals of the facilities, dependence on partners collaborators for product manufacturing, pricing and market externalities, sales, sales force effectiveness
Sathguru’s comprehensive due-diligence report formed the basis of transaction negotiations and business plan adjustments critical to transaction closure.