Valuation of a first in class, clinical stage small molecule to treat a range of tumor types

Challenge

A private biotech company was preparing for an IPO. The company was developing a first-in-class small molecule inhibitor with the potential to treat a range of tumor types. The company was conducting two Phase I/II clinical trials, one in a solid tumor, the other in an aggressive hematologic cancer. It had secured a deal with a leading immune-oncology pharma to secure access to a PD1 drug for a series of combination studies. The company was seeking an external valuation to support the IPO process; if the IPO valuation was too low then the existing investors were prepared to continue financing the company.

Solution

Alacrita developed a robust valuation model for the molecule, incorporating Monte Carlo simulation to accommodate real-world uncertainties. We provided a robust, evidence-based justification for every assumption, including epidemiology and patient population, peak market share, rate of market uptake, probability of success, development costs, commercial costs, and timelines.

Working with our team of expert oncology consultants, we reviewed each assumption and, if appropriate, tempered it with intelligent insight to ensure it accurately reflected our client’s situation. The valuation model included the three major pharmaceutical markets (USA, EU and Japan). We delivered our findings in report form. The company’s IPO was successful.

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