Life Science Due Diligence

Alacrita’s core team of Partners, each of whom has several years of industry experience, are supported by a team of expert, life science technical specialists who have substantial experience of conducting biotech and pharma due diligence; this expertise regularly deployed to support financial investment and licensing due diligence. Some selected examples are detailed below.

Due Diligence for an Rx Surgical Product

A publicly traded specialty pharmaceuticals company was considering acquiring a company developing an Rx product for use by surgeons. Alacrita assembled a team of expert pharma consultants including:

  • A former executive of a major surgical products corporation who had formerly managed a start-up company that successfully developed similar products and was subsequently acquired by the major corporation;
  • A pharmaceutical physician with direct experience of the product type;
  • An experienced market researcher with expertise in payer research on both sides of the Atlantic.

The team conducted an assessment of the market opportunity for the products being developed by the target company based on in depth interviews of relevant key opinion leaders in the US and major European markets, and payer research aimed at understanding acceptable pricing/reimbursement levels as well as the evidence base that would be needed to support them.

During the assignment Alacrita held an interim feedback session with the client’s investment team, and after another iteration with the management team of the target company, provided a final presentation to both the client and the target company.

Biotech due diligence of a Phase III oncology program

Alacrita supported a major pharmaceutical company in the due diligence and assessment of a Phase III in-licensing opportunity. The drug had met its primary endpoint in a pancreatic cancer Phase III clinical trial and our client was seeking ex-US rights to the program. Working to tight timelines, Alacrita selected expert consultants from its network who then worked alongside our client’s internal due diligence team, providing an external perspective and supplementing their internal expertise. Alacrita identified some minor issues and set out some recommendations to mitigate those risks. Our client went ahead with the deal, which included a $100m upfront payment.

Scientific and immunological mechanism of action due diligence for a big pharma client

For a major pharmaceutical company, Alacrita conducted scientific and immunology due diligence on a novel cyclic peptide targeting the complement cascade system. We reviewed the scientific and mechanistic experiments underpinning the clinical program to understand the risk around a clinical study failing an efficacy endpoint. The research program and resultant data demonstrated a compelling mechanistic rationale to treat the disease and we recommend our client should “proceed” from the standpoint of immunological mechanism of action and scientific merit.

Expert due diligence

For an established European pharmaceutical company, conducted an opportunity assessment of a reformulation of a marketed biologic. Alacrita quantified the market opportunity and assessed the market positioning and USPs of the target product. We also reviewed the competitive environment, assessing  sales and pricing of competitor products (based on IMS data) and likely competitive responses by entrenched players in the market.

Imaging due diligence

On behalf of a well-capitalized Swiss pharma company, Alacrita conducted a clinical and commercial Reality Check of a new imaging technology being developed that our client was considering acquiring. Alacrita’s expert imaging consultant reviewed the clinical evidence generated to date and provided an opinion as to whether the technology’s performance could displace existing methodologies and standard of care in the United States. We suggested that the commercial hurdles were higher than the target company was projecting and, as a result, our client did not proceed with the deal.

Rb82 due diligence

Our client was looking to build a capability in radionucleotide imaging and was seeking merger and acquisition opportunities in Europe and the United States. One target company was developing a new Rubidium 82 radionuclide generator, which is used for cardiac imaging. Alacrita was commissioned to conduct technical, regulatory and commercial due diligence on the company. As part of the commercial due diligence, we interviewed 45 cardiologists across the United States and Europe, building a picture of the commercial attractiveness and reimbursement prospects of the product that was in development. Alacrita identified major flaws in the company’s execution plan and commercial projections, fundamentally undermining the business case for our client’s investment.

Diagnostics due diligence

On behalf of a major European venture capital investor, Alacrita’s diagnostic consultant reviewed the business plan and competitive positioning of a novel point-of-care diagnostics company. Our analysis demonstrated that although the novel platform has superior economics relative to key competitors, its potential lead may be eroded by the time needed to broaden the test menu.

Phase III-ready radiolabelled antibody due diligence

For a well capitalised strategic investor looking to enter the radiopharmaceuticals market, Alacrita conducted clinical due diligence on a novel radioisotope-conjugated antibody designed to treat solid tumors. Alacrita assessed the clinical performance of the product, putting it into context of cancer therapies in general and benchmarked against other competing therapies designed to treat the same cancer. We developed an opinion on whether the product was sufficiently differentiated from its peers and its likely commercial potential.

Alacrita concluded that clinical trials conducted to date were largely academic conducted in a broad range of patient groups. There was very little actual clinical experience in the target patient population of the intended Phase III and in our view an investment in a Phase III program was not justified.

Clinical Due Diligence of a Novel Biologic to Treat Respiratory Disease

Alacrita’s respiratory consultant conducted clinical due diligence of a Phase II biologic designed to treat a respiratory condition. The project was conducted on behalf of a pharma company looking to purchase the asset. Alacrita’s respiratory expert examined the biotech company’s investigator brochure, clinical study reports, publications from previous clinical trials, statistical analysis plan and clinical protocol for the ongoing Phase IIb clinical trial, as well as correspondence from the European Scientific Working Party concerning potential pediatric development and FDA (CBER) in response to an IND submission for the Phase IIb protocol.

We found that, from the information provided, that the product at best delivered modest improvement in clinical outcome and significant toxicity/tolerability concerns. All patients developed anti-drug antibodies with increasing concentrations over time. The data suggested a potential negative risk/benefit balance in patients with the severe form of the disease in whom efficacy is likely to be more difficult to demonstrate and where use may be associated with greater risk of more severe adverse events (including anaphylaxis).

Alacrita’s due diligence team recommended that in-licensing or acquisition of the asset be considered only if the results of the ongoing Phase IIb study provided more compelling evidence than available at the time of assessment.

Soon after our assessment, the Phase IIb failed to meet its primary endpoint and the program was terminated by the company.

Oral delivery of biopharmaceuticals

Alacrita’s life science due diligence team assessed a proprietary platform technology for the oral delivery of biological drugs on behalf of an incoming lead investor. The scope of this project included:

  • Strength of pre-clinical data in comparison, as far as data are available, with competing approaches.
  • IP: ownership, likely strength of patent protection.
  • Clinical and regulatory strategy and execution; key risks and likelihood of success.
  • Competitor landscape, including direct and indirect competition.
  • Market potential. Given the core strategy to repackage existing drugs, several interlocking factors were analysed:
  1. Clinical and health outcome impact of switching from an injectable to an oral delivery system
  2. Potential for premium pricing over established injectable product
  3. Likely level of switching from injectable to oral product for existing patients
  4. Likely level of penetration in the new prescriptions segment
  5. Scope for broadening the market by taking share from alternative products
  • Manufacturing feasibility, investment needs and likely COGS.
  • Overall budget to reach product registration and market launch.

The project was undertaken and completed over a two week period and provided the client with an insight into key risks (technical, regulatory and commercial) facing the company.

Life science reagents due diligence

For a major UK bioscience investor, Alacrita conducted IP and commercial due diligence on a cell biology reagents investment opportunity. Alacrita reviewed the target company’s patent estate and conducted selective IP searches, revealing a weaker IP position than first thought. Alacrita identified the market segments for the technology, ranking them by commercial attractiveness and unmet need. Following interviews with key players in each priority market segment, it emerged that the market potential was smaller than originally forecast, the rate of market penetration would be slower and the benefit of the target technology would be considered incremental rather than a step change.

Regulatory affairs due diligence

For an established generics company looking to acquire the French rights of an existing product franchise, Alacrita conducted regulatory and clinical due diligence on the French dossier. The audit confirmed whether it was possible to register the product through MRP in other EU countries and Alacrita set out what resources/timeframes would be necessary to achieve this.

Cell therapy due diligence

A VC investor approached Alacrita for expert due diligence support for a $15m investment into a late stage cell therapy company. Alacrita assessed regulatory, manufacturing and IP documentation and analysed the product’s commercial prospects, identifying and characterising the principal areas of risk within the program. Following the assessment, the client made the investment and the company implemented a number of Alacrita’s recommendations to mitigate execution risk. Alacrita conducted the project within a very short time frame and both the client and the target company expressed a high level of satisfaction with the work conducted.

Novel Drug Formulation

For an established medical device company looking to make a strategic investment, Alacrita conducted commercial, regulatory, IP and technical due diligence on an investment opportunity in the diabetes therapy area. For the commercial due diligence, Alacrita undertook both US and EU market assessments through literature review and primary research with clinicians and patients. The resulting market forecast revealed that the product’s market potential was substantially lower than previously thought. Alacrita reviewed the company’s regulatory strategy for 505 (b)(2) regulatory approval in the US and identified a number of additional areas that needed to be addressed in the development plan. During the IP analysis, Alacrita judged that significant work would be necessary for the product to be considered novel or inventive given the state of the art at the time.

Pain due diligence

Alacrita conducted an expert ‘Reality Check’ on a pain in-licensing opportunity being considered by a European pharma company. Alacrita reviewed the clinical evidence generated by the biotech company to develop a picture of the commercial prospects of the proposed target product profile. We determined that the target product profile was commercially attractive, but given the underlying mechanisms of the drug and the data generated to date, it was highly unlikely that the product would generate the evidence of safety, efficacy and value that was being proposed in the target product profile.

Oncology cell therapy Reality Check

Alacrita conducted a Reality Check on a clinical stage cancer biologic for a venture capital investor prior to a proposed $10m investment. The analysis, which was completed within four days, included a review of a comprehensive dataroom encompassing preclinical, clinical, regulatory, manufacturing and IP matters. Alacrita’s report identified the areas of key risk in the project and suggested approaches to their mitigation.

Neurology generics due diligence

For a VC investor, Alacrita assessed technical, regulatory and market risks in a neuroscience specialty pharma company developing a range of products through the 505 (b)(2) regulatory pathway. The team provided a judgement on the likely investor returns under two possible scenarios, and advised on the most likely exit triggers/timing. The client expressed a high level of satisfaction with the work.

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