Challenge:

An investor group was facing its first potential deal in the pharmaceuticals sector. It had pre-negotiated a deal with a group that had invented an approach to treating chemotherapy-induced anemia and urgently needed third party advice regarding the merits of the investment and the proposed deal terms.

The initial scope of the assignment was to provide an independent expert view of the following items:

• The likely capital requirements over the lifecycle of the project;
• The potential commercial returns should the development of the drug(s) prove successful;
• The deal terms relative to industry standards.

Solution:

Alacrita's due diligence team, together with an experienced business development consultant from our consulting network, who has a successful track record of licensing transactions, assessed the below items:

• The scientific justification for the project;
• The evidence base supporting the proposed development plan;
• The likely clinical and regulatory pathways that the drug would face;
• CMC and toxicology issues facing the project;
• The terms of the proposed investment and licensing deal.

We identified a number of major material risks and proposed major changes to the development plan and the investment strategy. In parallel with Alacrita's assignment, the product originators had submitted a pre-IND meeting package, and the FDA response which was available after Alacrita had provided its report confirmed the main issues that we had identified.

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