Catenion Introduces Pre-Due Diligence and Due Diligence Support

Licensing and M&A activity has continued unabated in the bio-pharmaceutical space. The reasons are the impending patent cliff, which a number of the larger players have to face, as well as the appetite of new entrants.

Yet, for each transaction that actually takes place licensees typically perform up to ten due diligences and anywhere between 50 and 100 pre-due diligences. As the overall industry pipeline of projects has expanded, more assets need to be assessed by would-be licensors. The opportunity cost in terms of the time spent by top internal experts away from their day-to-day jobs in line management and on project teams is incalculable.

Catenion’s approach is to systematically review all the evidence and collate legitimate views on the asset’s inherent risks and potential. Our advantages are:

  • Independent, rigorous perspective, objective
  • Industry best-practice, validated approach and tools
  • Experienced team – more than 1,000 R&D projects assessed in-depth across TAs, technologies, and development stages

At the pre-due diligence stage, we offer a timely, independent recommendation whether or not to proceed to full-scale due diligence. Our recommendations are backed up by an unambiguous positioning of the target asset in terms of its risk profile and commercial potential. Results are documented in the form of a written report and explained to the client via a web or telephone conference.

The risk profile of the asset is based on the data available in the public domain and systematically put in the context of data generated by competing compounds in class / indication.

For the assessment of commercial attractiveness, we use a validated method of evaluating the innovativeness of the approach in terms of its novelty and usefulness; the result is then factored into a standard, epidemiology-based process of computing ranges of peak patient share and sales potential.

Our due diligence support uses the Catenion proprietary tool set including a 500 criteria strong R&D risk assessment protocol and competitiveness modelling for full development projects. We accompany client teams into the data room and provide in-depth, full-scale valuations of individual assets and companies. Results are documented in the form of a written report and explained to the client in a face-to-face meeting.

In the R&D risk assessment protocol, individual risk criteria are aggregated into six risk classes, which are relevant for decision-making: conceptual risk, capability risk, compound risk, clinical indication risk, product supply risk and regulatory risk. For full development assets, we assess commercial potential with the help of indication-specific competitiveness models, in which we estimate sales potential for both the compound under investigation, as well as for the main competing compounds. All of our service offerings comprise an in-depth assessment of the scientific and technical merits of the asset; depth of analysis of commercial potential varies from ‘directional’ for the base packages to ‘in-depth’ for the comprehensive packages.

Our services are fully confidential and not driven by transaction value, minimising the risk of ‘winner’s curse’.

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