<![CDATA[ - Blog]]>Sun, 12 Nov 2017 14:15:11 +0000Weebly<![CDATA[Practitioner's guide to sales force competitive intelligence in the pharmaceutical and medical devices industry]]>Sun, 12 Nov 2017 00:00:00 GMThttp://biopharmavantage.com/blog/practitioners-guide-to-sales-force-competitive-intelligence-in-the-pharmaceutical-and-medical-devices-industryBenchmarking refers to the comparison of the metrics, processes and practices of a particular business to the others in the industry. It brings external perspective to the table, triggers sanity checks, eliminates internal biases, reveals blind spots and provides an opportunity to emulate or exceed.

Sales force is the most significant resource deployed by healthcare companies in order to drive the uptake of their assets. The utilities of sales force benchmarking exercises are numerous, for both emerging and established healthcare, pharmaceutical, biotechnology, diagnostics and medical devices companies. The primary stakeholders of sales force information are brand teams, competitive intelligence, commercialisation strategy, licensing and partnering, new product planning, search and evaluation etc. Based on our prior experience, some of the applications of sales force competitive intelligence are summarised below:
  • Performance improvement and understanding the practices and praxis of best player in the industry
  • Understanding peers’ sales force strategy, and refining one’s own strategy
  • Assessment of human resources requirements for launch of new products
  • Assessment of investment requirements to establish/augment sales capabilities
  • Elimination of any uncertainty associated with the estimation of resource requirements for commercialisation
  • Optimisation of go-to-market strategy for launch and commercialisation
  • Comparison of in-house commercialisation effort with licensing and partnering deals
  • Negotiation assistance with respect to deal terms
BiopharmaVantage takes pride in providing premium quality worldwide sales force competitive intelligence to pharmaceutical, biotechnology and medical devices companies. If you would like to explore how we can assist, then please contact us.]]>
<![CDATA[Ultimate Driver in the Valuation of Life Sciences and Healthcare Assets and Businesses]]>Mon, 17 Jul 2017 23:00:00 GMThttp://biopharmavantage.com/blog/ultimate-driver-in-the-valuation-of-life-sciences-and-healthcare-assets-and-businessesOver the years, the two industries i.e. pharmaceutical and biotechnology, that offered treatment interventions to patients have converged. An obvious example is the abundance of biotech based drugs from both traditional pharmaceutical companies as well as biotechnology companies. Assessment of the fundamental business attributes of the two industries generally reveals that the risk profile of the two industries not too different. So what does this mean for asset valuation of an emerging biotechnology or pharmaceutical company?

Traditionally, the cost of capital, aka discount rate applied to the DCF method, has been higher for the biotech sector than that of pharma sector. So if you are a small biotech seeking a deal with established pharma who has multitude of assets like yours, would you agree for a higher discount rate in the valuation exercise, bearing in mind that higher the discount rate, lower the value. Alternatively, if you are an established pharma, you would argue that the fundamental business characteristics determine the discount rate, so a higher discount rate is justified. After attrition rate, (conversely, probability of success through the developmental stages), the discount rate is the greatest determinant of asset value. Using appropriate discount rate as well as other parameters in the valuation process are critical for estimation of fair value. Furthermore, it is always a good practice to triangulate using other methods of valuations such as comparables/benchmarking.

BiopharmaVantage is a boutique healthcare consultancy that provides valuation services for the pharmaceutical and biotechnology and life sciences companies. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Appropriate Addressable Markets in Life Sciences Commercial Due Diligence and Pharmaceutical New Product Planning]]>Thu, 29 Jun 2017 23:00:00 GMThttp://biopharmavantage.com/blog/appropriate-addressable-markets-in-life-sciences-commercial-due-diligence-and-pharmaceutical-new-product-planning​Addressing the appropriate market is often one of the key success factors in commercial due diligence, new product planning, opportunity assessment and business plans. Prima facie, everybody likes large market size and significant unmet needs. However, it is vital to focus on the market or segment where the asset will compete, at least in the first instance.   

Case-in-point: Significant excitement about a first-in-class biologic for asthma treatment. While there is a high unmet need and the asthma market size is large, the first-in-class biologic therapy is unlikely to be the first-line treatment for asthma, primarily for two reasons: a) the medical treatment algorithm might call for much simpler intervention as the first-line of treatment b) price watchdogs may stipulate cost-effective options as the first-line treatment.  

Similarly, a novel cancer therapy, while it may be groundbreaking, may not become the first line treatment. E.g. the market size for prostate cancer might be huge but a 3rd line treatment entry, would make the market size much smaller, despite significant unmet needs. A good practice is to identify the right market segment, estimate the market size and then address the competitive landscapes in that market/segment.

BiopharmaVantage specialises in providing commercial due diligence services to healthcare companies and investors. If you would like to explore how we can assist, then please contact us.]]>
<![CDATA[Optimally Leveraging Biosimilars Competitive Intelligence in the Pharmaceutical Industry]]>Mon, 19 Jun 2017 18:09:01 GMThttp://biopharmavantage.com/blog/optimally-leveraging-biosimilars-competitive-intelligence-in-the-pharmaceutical-industryMyriad of economic and patients’ benefits arguments could be made for making the widespread use of biosimilars. At a macro level, the pharma industry, in the context of biologics drugs is divided into novel and biosimilars makers. However, there are several novel companies that seek to bring biosimilars to market. The rationale for such a strategy is justified by the existence of synergy. The company might have extensive experience of say, blood cancer market via past experience with novel drugs, and thus has the ability to excel in that therapy area. The basis of synergy might be due to following factor(s):
  • Ability to manufacture biologics drug regardless of them being novel or biosimilar molecules- This is generally true as the process of making monoclonal antibodies or recombinant proteins is similar irrespective of them being novel drugs or biosimilars.
  • Reduced cost of manufacturing- This happens when the biologics manufacturing plants have excess unused or underutilised capacity. Consequently, the incremental cost of manufacturing is not significant. An extension of this fact is the prevalence of pharma companies with biologics manufacturing capabilities acting as CMOs for others players in the industry.
  • Existence of robust quality management system- This essentially involves a well-established capability to implement analytical methods to demonstrate biosimilarity with minimal or acceptable variance.
  • Right infrastructure to conduct and expedite the clinical trials- A novel pharma has access to several trial sites and network with investigators to conduct required trials for the biosimilars drugs.
  • Marketing infrastructure- A novel pharma has experience of marketing biologics drugs to the appropriate targets. The company will have necessary sales, MSL, market access team etc. in place in order to market the biosimilars as well.
In general, a qualitative assessment of the biosimilars in most cases present an attractive opportunity. However, there are fundamental factors that need to be addressed, which are often overlooked. These are appropriately probed by two rather simple questions:
  • Whose money we are putting into biosimilars?
  • Are we acting in the interest of the parties whose money we are using?
For any company, the money deployed is investors’ money. For a public traded company, it is shareholders’ money and for SMEs it is usually private equity/venture capitalist’ money. If we are not acting as per the mandate of the investors, then in a purist corporate finance/economics parlance, we have a ‘principal-agent’ problem. A general accepted practice is- if the money has been provided for developing novel drugs, it should you be used for that purpose rather than for developing biosimilars, generics or any other class of assets/activities. If investors wanted to invest in other areas, they could directly invest in such opportunities/companies. This is one of the key reasons when investors ask the company to be split into different entities such as established unit and novel unit etc. Various signals are interpreted and priced in the capital market when a novel pharma embarks on biosimilars drugs. Some signals are- the company has not enough growth opportunities in novel drugs, the company lack confidence in the pipeline, the company has not confidence in the next generation of biologic meant to supersede biologic which is likely to be eroded by biosimilars entry etc.

Typical biosimilars competitive intelligence programs are asset-centric i.e. they generally look at the market dynamics, landscapes, timelines, differentiation, launch plans, sales force, market access, promotions etc. However, visualising biosimilars and associated intelligence in a corporate-centric fashion such as business case, investment appraisal, commercial due diligence, licensing, M&A and transactions brings in the corporate finance/economics aspect and general holistic perspective to decision making. When assessed through multiple facets, the intelligence, its interpretation and implications become more value added. This enables managers to take more aligned and superior decisions in their quest for competitive advantage.

BiopharamVantage is a specialty healthcare consultancy that provides high quality competitive intelligence and decision-support services to pharmaceutical and biotechnology companies. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Key To Success In Medical Devices And Diagnostics Competitive Intelligence]]>Sat, 17 Sep 2016 17:12:28 GMThttp://biopharmavantage.com/blog/key-to-success-in-medical-devices-and-diagnostics-competitive-intelligenceDespite often clubbed with pharmaceutical sector, the competitive intelligence gathering process in the medical devices and diagnostics has its own idiosyncrasies. The difference is most pronounced in the context of R&D and new products development. This is often more challenging than those in pharmaceutical sector, due to the fact that the asset developmental window is small in the diagnostic and devices sector. In pharmaceutical sector, for example, when an asset progresses through clinical trials, it provides multiple opportunities to collecting intelligence. Furthermore, the window of the opportunity is sufficiently long, usually several years as the asset progresses through the stage-gated phases. In medical devices and diagnostics sector, this window is relatively smaller. However, smart diagnostic and medical devices companies offset this by frequently attending congresses and trade shows which provide an opportunity to collect intelligence rather efficiently in a short period of time. Regular patent tracking, a strategy most prevalent in the telecom sector, is also a good practice to gain competitive insights on early stage assets and emerging pipeline. Desk based primary intelligence gathering requires a team of consultants who have extensive experience of the sector and have astute respondent finding and eliciting capabilities.

BiopharmaVantage is a consulting firm that specializes in providing competitive intelligence services to diagnostics and medical devices companies. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Medical Conferences for Pharmaceutical and Diagnostics Competitive Intelligence]]>Thu, 15 Sep 2016 15:56:28 GMThttp://biopharmavantage.com/blog/medical-conferences-for-pharmaceutical-and-diagnostics-competitive-intelligenceMedical congresses and trade shows are goldmine of high quality competitive intelligence. They offer an excellent opportunity to gain insights into competitive landscape, competitors strategy, new products, R&D, evolving paradigms, new launches, positioning and messaging, views of KOLs etc. Some of the key factors that make congresses and trade shows superior competitive intelligence gathering opportunities are summarised here.
  • The ‘density of the respondents’ i.e. number of people who can be approached for intelligence collection per unit area, is relatively high.
  • Secondly, with the in/out flux of respondents, there are multiple opportunities to engage in conversation for intelligence.
  • Because of the intrinsic nature of the event, most respondents are willing to talk and disseminate information.
  • In case of pharmaceuticals, for most therapy areas, there are at least two congresses in a year- one in the US and another in the Europe. Similarly, there are European and American counterparts for medical devices and diagnostics conferences. This further increases the opportunities of competitive intelligence gathering.
  • The amount of intelligence that can be collected from conferences and trade shows is extremely high. Moreover, the intelligence is fresh and can be collected in a relatively short time period - usually the duration (3-5 days) of the conference.
  • The intelligence gathering by a third party vendor is efficient and circumvents the issues associated with in-house efforts.
  • As a supplier of competitive intelligence, we notice that the ROI for intelligence gathering from conferences is ~3-4 times higher than those of similar desk based intelligence gathering efforts.
BiopharmaVantage is a provider of competitive intelligence services to pharmaceutical, diagnostics and medical devices companies. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Maturity of Competitive Intelligence Function in the Pharmaceutical and Medical Devices Industry]]>Sat, 27 Aug 2016 11:09:21 GMThttp://biopharmavantage.com/blog/maturity-of-competitive-intelligence-function-in-the-pharmaceutical-and-medical-devices-industryIn the past we discussed the prevalence of competitive intelligence (CI) in various functions of pharmaceutical sector versus other sectors- a cross-industry comparison. CI is a reasonably established function in the pharma and diagnostics industry. However, some companies have been early adopters of the practice; most are 'early/late majority' adopters and some have yet to leverage the benefit. Here we summarise the maturity of CI function in the sector. This should serve as the preliminary basis for benchmarking, empowering and finessing the role of CI in typical pharmaceutical and medical devices companies.
  • Service Provider: This is the elementary level of CI function in pharmaceutical companies. At this stage, CI functions are mostly tactical, research oriented and focused on finding facts. The group works on a project basis to produce intelligence upon demand from internal stakeholders. It has a limited budget, headcount, and influence in the organisation, and receives limited senior executive support. The function's communications concentrate on project results that target a narrow audience, primarily the stakeholders who commissioned the project.
  • Contributor: At this stage, CI is more than tactical function. The unit concentrates on translating customer insights into implications and business recommendations. It leverages synergy from past projects from the same or different stakeholders, forms bodies of knowledge and has broad perspectives. The unit at this stage has active support from the senior marketer in the company as well as greater access to senior business unit leaders. However, business leaders set priorities. The CI budget exists outside the function's control, and the group's representation on the executive team and its exposure to the board are limited.
  • Advisor: This is the next level of maturity of CI in the company. At this stage, senior executives stipulate informed and evidence-based decision making. The CI function acts as in-house Consultants in the organisation. In addition to standard CI projects, CI team members demonstrate critical thinking, a willingness to challenge ideas and status quo, have an understanding of R&D and marketing. Most of the projects are asset/brand centric. The CI team act like a 'sensing, learning and prescribing' unit.
  • Partner: At this level, CI function acts as a strategic partner. The unit is focused on innovation, foresight, and predictive capabilities. CI usage goes beyond asset-centric decisions i.e. the unit is involved in corporate level decision making, including product and portfolio strategy, strategic planning, licensing and partnering, M&A, employee engagement, manufacturing, supply chain, etc. The CI team exerts significant control over budget and is truly embedded in the decision-making processes. The team is seen as a thought leader rather than a project executor or insights provider. The team has sound economic, strategic and corporate finance understanding, and has the ability (and credibility) to address critical business issues, provide top-class implementable solutions that are aligned with the organisation and its stakeholders and shareholders. 
BiopharmaVantage is a speciality consulting firm that provides competitive intelligence services to pharmaceutical, diagnostics and medical devices companies. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Key Elements of Commercial Due Diligence in the Healthcare and Life Sciences Sector]]>Sat, 27 Aug 2016 10:58:39 GMThttp://biopharmavantage.com/blog/key-elements-of-commercial-due-diligence-in-the-healthcare-and-life-sciences-sectorDue diligence is the process by which buyers conduct investigation and evaluation of potential acquisitions and investments. Among various classes of due diligence, commercial due diligence is one of the key ones as it is associated with the future revenue generating potential of the business. For healthcare and life sciences investors, one could argue for a case of rigorous due diligence. The reason being- life sciences based sectors usually have a high risk when compared with other sectors. A rigorous commercial due diligence helps to mitigate risks and in certain cases, conducting objective due diligence might be a fiduciary requirement.

Commercial due diligence usually involves extensive 'external analysis' and often comprises assessment of the market, competitive landscapes and customers. We briefly describe each of these elements here. The objectives of market assessment are to establish the current market size, future market size and the expected growth. As a best practice, BiopharmaVantage emphasises on 'forward looking' metrics and understanding of the fundamental drivers of the market. It is also vital to know which 'market segment' would the target compete in. Subsequent research and analysis should focus on 'deep-diving' into this market segment. We have seen numerous examples of 'inappropriate segments' where the targets reference to the attractiveness of the entire market but in reality only has the potential to compete in a sub-segment of it.

Assessment of competitive landscape is another critical element of the commercial due diligence exercise. A good practice is to assess both- the current landscape as well as future landscape. This is important for assets and businesses that have a longer gestation period (e.g. pharmaceutical, diagnostics, medical devices, etc.) i.e. it takes a long time to get the product to the market. The focus of competitive landscapes should be target market segment, but one should be cognizant of competition from other markets and segments. Our wider definition of competitors is simple- any business asset/entity that has the potential to affect revenue adversely. 

Customer assessment is an integral component of commercial due diligence. Appropriate customers need to be identified based on the target market segments, factoring in the B2B and B2C aspects of the business. Interviewing customers allow one to gain insights on their preferences, key asset attributes, current and future buying behaviour, etc. This also enables assessment of the target's offerings to address unmet or under-met needs, ability to deal with evolving needs, value proposition and its sustainability. Sources of information include market reports, databases, government resources, competitors, interviews with KOLs and other key stakeholders. 

BiopharmaVantage is a speciality consulting firm that provides due diligence services to healthcare and life sciences investors. If you would like to explore how we can assist, then please contact us.]]>
<![CDATA[Robust Addressable Market Size in Life Sciences Commercial Due Diligence]]>Fri, 19 Aug 2016 12:07:32 GMThttp://biopharmavantage.com/blog/robust-addressable-market-size-in-life-sciences-commercial-due-diligenceMarket size is one of the critical elements in commercial due diligence, new product planning, commercial assessments for licensing/partnering and investments. Computing from the first principle is a robust approach and help clients understand the fundamental drivers of the opportunity. For a typical pharmaceutical asset, the process is summarized below:
  • Number of patients: This involves using demographic and epidemiological data, and uses the following formula:
    • Country population x Prevalence/Incidence x Diagnosis rate x Treatment rate
  • Addressable Segment: In this step, the total number of patients is further drilled down to identify the segment where the therapy/intervention will be used. For example:
    • If the treatment is second line therapy, then computation needs to factor-in the fraction of patients who fail first-line treatment.
    • Similarly, if the therapy uses a biomarker, then the computation should include only the fraction of patients who are biomarker positive.
  • Patients on product: This step effectively estimates what fraction of the addressable patients would be treated with the therapy considering the competitive landscape. This process also utilizes KOL interviews/market research to compute the market share, and leads to estimation of patients on product.
  • Annual product requirement: Here we multiply the number of doses per year and the fraction of patients who complete the medication schedule (compliance) i.e. we ignore the fraction of patients who stop medication for various reasons. This provides unit sales of the product on an annual basis.
  • Price: We compute the price using various approaches. Analogue pricing involves looking at the price of comparable drug and pricing similarly. If there are good pharmacoeconomic indicators, cost saving arguments, etc., then there is opportunity for a premium price by articulating a compelling value story to the payers. A typical pharma company will discount the list price for favourable pricing and reimbursement, and a wider market access strategy, so factor this in the model. A good practice is to conduct sensitivity analysis around price.
  • Peak sale: Product peak sale is estimated rather simply by multiplying annual unit sale with expected price.
BiopharmaVantage is a healthcare consulting firm that provides commercial due diligence services to pharmaceutical, biotechnology, diagnostics, medical devices companies and healthcare investors. If you would like to explore how we can assist you, please contact us.]]>
<![CDATA[Why Discounted Cash Flow Analysis Reigns Supreme Amongst Valuation Methods in the Life Sciences Sector?]]>Wed, 17 Aug 2016 12:46:45 GMThttp://biopharmavantage.com/blog/why-discounted-cash-flow-analysis-reigns-supreme-amongst-valuation-methods-in-the-life-sciences-sectorIn the pharmaceutical, biotechnology and other life sciences based sectors, valuation is used in numerous decision-making processes such as new product planning, opportunity assessment, business development, licensing, partnering and in-house investment or investment by private equity and venture capital investors. Valuation using discounted cash flow (DCF) method employing NPV (net present value) analysis incorporates most appropriate business metrics and is also aligned with the interest of the owners of assets. In purist terms, decisions based on the valuation usually avoid the ‘principal-agent’ problem.

Valuation often happens to be the most widely discussed topic in several conferences and forms many research theses. Currently, DCF and comparables based methods are mostly employed valuation methods. Like any evolving discipline, new methods of valuation emerge and proponents of new valuation methods invariably highlight the drawbacks of the DCF methodology.  In real biopharmaceutical business scenarios, employing most DCF alternatives usually leads to higher value estimations. Is this good or bad? The answer is - it depends. Specifically, it depends on which side of the transaction you are on.
  • If you are a seller of assets, then you would prefer DCF alternatives that give you high value. However, a savvy buyer is likely to disagree with you and would most likely put methods, structure and options to contain your value.
  • If you are a buyer of the assets, then you would like to employ a method to compute lower value as you want to buy inexpensively.
  • In a corporate setting, for example, in new product planning and commercial assessments, you might want to show the higher value of an opportunity using other valuation methods versus DCF/NPV based method. However, this does not exonerate you from conducting DCF based valuation.
  • Similarly, in business development and licensing scenarios, if you are out-licensing, you might want to use DCF alternatives, but if you are in-licensing, you would prefer DCF valuation.
The simplicity of the DCF method lies in the additive property of NPV. If a company undertakes a new value creating, i.e. one with positive NPV project, the NPV of the project adds to the total value, the NPV of the company. This makes it easy to justify the project and investment and to assess the ex-ante contribution of the project to the company and its stock price. Since capital market values a company and its stocks using DCF based methodology, we believe adopting a market aligned method is the most pragmatic approach for practitioners and decision makers.

BiopharmaVantage is a boutique healthcare consultancy that specializes in providing valuation services specifically for the pharmaceutical, biotechnology and wider life sciences sector. If you would like to explore how we can assist you, please contact us.]]>