A clinical stage company developing small molecules to treat fibrotic diseases engaged Alacrita to quantify the value potential of their lead asset in idiopathic pulmonary fibrosis (IPF), non-alcoholic steatohepatitis (NASH), and acute respiratory distress syndrome (ARDS). The drug had completed preclinical proof of concept studies and was currently in IND-enabling studies. For each indication, Alacrita was required to build a target product profile (TPP) and a rNPV valuation of the lead asset, focusing on the US, EU5, and Japan markets.


After developing TPPs, Alacrita projected the addressable market considering the target patient population, market share, drug pricing, clinical development timelines and costs, etc. Using this information, we estimated potential product revenue in US, EU5, and Japan for IPF, NASH, and ARDS. We also considered the probability of success at each go/no-go development/regulatory pivotal point and the impact of that on the valuation.

For many of the input assumptions required for the valuation there was significant uncertainty, particularly given the early stage of development of this lead asset. We therefore used Monte Carlo simulation to express rNPV as a range and probability distribution. Outputs of the valuation model also included histograms and tornado plots, the latter highlighting input parameters that drive the sensitivity of the valuation.

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