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Valuation
A European biotechnology company acquiring a third party patent estate in order to achieve freedom to operate for its key technology platform, required an independent valuation of the acquisition and based on that valuation, an economic justification of the deal terms.

The objectives for the client

 

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  • To establish whether or not the company had freedom to operate without accessing the patent estate.

  • To identify and cost out other viable options, including the risk and cost of litigation.

  • To confirm the value of the IP acquisition to the company in terms of:

    • value retained in the current pipeline

    • additional value through acquisition of the IP.

  • To provide the Board and regulators with an independent review of the purchase price, how it was justified internally and whether such justification was reasonable.

  • To benchmark the deal, including milestone and royalty rates, against similar technology access deals.

The programme of work

  • A review and analysis of the key technology platform, related intellectual property, licences and cross licences.

  • Examination and benchmarking of deal terms against other relevant technology access deals in the biosciences field.

  • Creation of an epidemiological and market forecast for four separate therapeutic fields (ovarian cancer, small cell lung cancer, non Hodgkin's lymphoma and rheumatoid arthritis).

  • Commercial evaluation of the company's lead development products in these therapeutic areas (market share and revenue).

  • Creation of a probability based Net Present Value (NPV) valuation model for the IP acquisition and alternative strategies identified by Bridgehead Consulting.

 

The deliverables to the client

  • A comprehensive report addressing the company's stated objectives above.

  • The report was subsequently included in the "Auditors Report" to gain regulatory clearance for the deal.

  • A tailor made probability-based NPV model covering the major elements of the company's current business activities.

 

The project achievements

  • Board approval of the deal.

  • Regulatory approval of deal
    (register)—required because of an equity element in the deal.

Added value

In addition to providing the client with an independent endorsement and valuation of a critical multi-million dollar IP acquisition, the project provided a third party assessment of the company's key technology platforms, lead development products and commercial strategy as well as providing an assessment of the key markets into which the company will go.

 

 

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