Pharmaceutical Due Diligence Consulting
Alacrita due diligence consultants have been a trusted DD source for close to fifteen years, conducting assignments for large pharma, biotech, universities and investors. Every due diligence we perform is underpinned by our ability to incorporate individuals into each project who have the exact matching expertise required for a complete, thorough and accurate assessment.
Our core due diligence team draws from a 250-member network of functional specialists, each with a miniumum of 20 years of industry experience, to rapidly assemble due diligence teams that incorporate senior consultants specializing in the functional discipline, product modality, or disease area, that matches the parameters of the asset, program or company being evaluated. This allows us to provide assessments that are precisely on target.
As a result, we're able to undertake all aspects of technical, scientific and opportunity due diligence and provide thorough and accurate assessments that our clients place trust in.
Our activities frequently include:
- An initial review of data to gain an understanding of materials available and expertise required
- Pre-DD assessment to identify any “red flag” areas
- Selecting and deploying teams of technical evaluators matched to the client’s need, and supplementing with primary and secondary research
- Reporting our findings in a risk assessment dashboard, enabling our client to quickly identify where key risks and mitigation opportunities lie
- Providing an opinion on whether the company or asset faces lower or higher than average risk, compared to industry averages
We also frequently lead focused internal DD exercises that prepare companies for exposure to DD by investors, acquirers or licensors.
The following list of recent projects and due diligence case studies can help illustrate the type of due diligence we typically provide to clients.
Recent Due Diligence Consulting Projects
- Due diligence on a gene editing platform to inform a company research partnership: A private biotech client with a focus on innate immunity, was considering a research collaboration with an innovative new company in the field of gene editing. Before committing to this partnership, our client wanted an independent and expert assessment of the gene editing company, its pipeline and its platform technology, including an opinion on whether this company represented the best option for a collaboration of this kind.
- Investor due diligence on clinical stage oncology therapeutic company: A private equity investor bidding for a Phase III gene therapy asset at the point of regulatory submission required specialist DD input on the manufacturing and regulatory aspects of the product. The nature of the technology required a higher than usual level of specialization that the PE investor recognized would not be available in its standard DD vendors.
Assessing an AAV gene therapy for an ophthalmic indication: We were asked to conduct an assessment of an AAV gene therapy for an ophthalmic indication, focusing on market potential, technical and regulatory issues and the identification of key risks. The resulting assessment would be used by the client to decide whether to proceed with a proposed transaction.
Cardiovascular gene therapy due diligence: An academic organization was interested in developing an AAV vector-delivered gene therapy for a cardiac indication and required assistance with a technical review of their program and preclinical development recommendations.
Assessment of target opportunities for biologics pipeline: For a mid-cap pharmaceutical company seeking to establish an oncology biologics pipeline through partnership with a mAb development boutique, Alacrita assessed the quality of a range of target opportunities, the soundness of third-party contracts and the underlying IP position and risks.
Providing a reality check on an oncology cell therapy: Alacrita conducted a reality check on a clinical stage cancer biologic for a venture capital investor prior to a proposed $10m investment.
Providing scientific & immunological mechanism of action due diligence: For a major pharmaceutical company, Alacrita conducted scientific and immunology due diligence on a novel cyclic peptide targeting the complement cascade system.
Recent Due Diligence Consulting Case Studies
Challenge: A contract development and manufacturing organization (CDMO) was in negotiations to acquire two manufacturing sites from other companies. Under normal circumstances, the client would have conducted all of the due diligence internally. However, the transaction was taking place during the time of the COVID pandemic and the client urgently needed a CMC specialist to conduct local due diligence of the facilities.
Solution: An Alacrita CMC expert was only able to conduct a virtual DD of the target facilities due to the travel restrictions in place during lockdown, but even this proved useful for the client given the expert's local knowledge and ability to understand the operational culture at the plant. The CDMO completed the acquisition and was later acquired by a private equity investor.
Challenge: A PE fund was looking at the potential purchase of a package of minority holdings in a portfolio of biotech companies on the secondary market. The fund approached Alacrita to conduct a due diligence of the core holdings across a range of technologies and therapeutic areas. The due diligence covered both technical and commercial factors.
Solution: Given the diversity of the portfolio, Alacrita assembled a core DD team supplemented by specialists from its expert network to provide input on the different technologies and disease areas. The risks that we identified were diverse. For one asset, the fundamental issue was clinical risk due to technical challenges of achieving endpoints in neurological disease. At the other end of the spectrum, a company had an asset with a high level of approvability by regulatory agencies but which would face severe commercial pressures in a largely genericized marketplace. For various reasons, the transaction did not complete.
Challenge: A VC investor wished to make an investment in a California-based preclinical biotechnology company with a discovery platform and novel T cell therapies for cancer and other diseases. Alacrita was commissioned to use its experience in cell therapeutics to perform a technical and scientific due diligence on the company to highlight any key risks and to propose mitigation strategies.
Solution: Alacrita reviewed information provided by the client and compiled a report, analyzing the following key areas in the technology platform and therapeutic programs:
- Therapeutic focus
- Molecular targets
- Scientific rationale
- Pre-clinical data
- Regulatory status/correspondence
- CMC issues
- Clinical development plans
- Competitive landscape
- Market opportunity
- Company infrastructure.
Upon further discussion with the target company on issues raised during the initial review and analysis, we finalized our report to the investor summarizing the above points and outlining the key risks in the programs. The company agreed that the identified risks were indeed material, and one of the predicted issues occurred shortly after our report was finalized.
Challenge: Our client, a major pension fund, was considering an investment in a Phase III neuroscience company, which was developing a small molecule to provide symptomatic relief of Alzheimer’s Disease (AD). Our client wanted to know the likelihood of clinical success in an ongoing Phase III clinical trial, therefore, one of our neuroscience consultants was selected to provide expert advice.
Our lead consultant had significant experience in neurology, psychiatry and molecular neurobiology, as well as 20-years experience in drug development from first-in-human studies through multiple Phase III clinical trials, across a range of CNS indications. Prior to joining the Alacrita network, he had been Chief Medical Officer and SVP in Drug Development at a neuroscience company.
Our due diligence team reviewed the contents of the data room, including investor presentation, investigator’s brochure, Phase III protocol and statistical analysis plan, Phase II clinical study reports, publications and regulatory correspondence. Our work focused on:
Assessing the appropriateness of clinical design, mitigation of adverse events and safety factors
Identifying the risk factors facing the AD clinical program
Determining completeness and appropriateness of regulatory response
Assessing the likelihood of clinical success and reviewing the overall development strategy
We completed the due diligence within two weeks and provided initial feedback to the client’s investment team. Upon receiving further clarification from the company, we provided a written report to the client, setting out the major risk factors. Finally, we held direct communication with the client’s team to explain our findings and answer any questions.