Challenge

A division of a multinational pharma company needed support evaluating a pipeline agreement with a platform technology company. The client wanted to know what the overall value of this partnership would be.

Solution

We assessed the commercial potential of the opportunity and provided a critical analysis of the risk adjusted NPV (rNPV) model in use by the negotiation team. We tested the underlying assumptions using real-world data incorporated into a Monte Carlo simulation model.

The approach provided greater insight into the impact of the underlying uncertainties, allowing the key outputs (e.g. NPV) to be expressed as a range, with confidence intervals, rather than a single number. We also reviewed a selection of early-stage biotechnology deals to generate a comparables analysis.

This allowed the deal to be benchmarked against analogous transactions, also serving as a useful cross-check of the rNPV analysis. We helped the in-house team build the case for the deal at board level, emphasizing the value of the strategic logic of the deal and setting out the non-financial drivers of the opportunity.

Valuations Services

Our expert teams develop in-depth valuation models for our clients, helping inform strategic decision-making and investments.