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Case Study 03: Merger and Acquisition Strategy

Situation

A successful biopharmaceutical company faced the impending patent expiry of an industry leading product that had largely provided for the firm’s revenues and growth. In the absence of a near-term product launch from internal research and development efforts the client needed to turn to L,M&A to provide for required growth. Frankel Group was engaged to aid the company in the identification, prioritization and valuation of opportunities.

Complication/Opportunity

Our client’s existing portfolio covered an array of therapeutic areas and physician segments. Complicating the assessment was the lack of clear direction of product/platform/company opportunities that would leverage either existing technology or customer/channel assets into a migration strategy. Ultimately the client’s area of interest was defined primarily by stage of development (as driven by their financial, risk and timing constraints) that still covered effectively a third of internal medicine.

Approach and Resolution

Frankel Group initiated a broad, iterative opportunity identification and prioritization effort spanning the full array of the client’s field of interest. Despite the daunting scope of the client’s interest the foundation to L, M&A was provided as it must be through a detailed clinical review of unmet need informed by both secondary research and primary research with thought leading physicians on a disease by disease basis. A thorough review of late-stage development projects was then mapped against areas of unmet medical need and matching opportunities ranked according to clinical, strategic and initial financial criteria. This first pass prioritization supported the identification of a short list of matching opportunities for full valuation via a real-options risk adjusted methodology. Finally, a retrospective review of the full list re-aggregated by developing company allowed for an acquisition prioritization process to follow.