Case Studies

Assessment of Global Net Present Value (NPV) – for an early stage drug for Malaria Treatment

Assessment of Global Net Present Value (NPV) – for an early stage drug for Malaria Treatment

About the Client

An anti-malarial focused drug discovery company in the USA

Client Problem

A leading drug discovery company with focus anti-malarials had received grants and discovered a new drug which not only treats malaria but also has better resistance to bacteria. The client was actively looking for drug development partner and wanted to showcase the business case for partnering / licensing.

The Solution

  • pManifold involved domain specialists and collaborated with the client to work on this engagement.
  • The malaria market was studied and three different annual demand scenarios – Pessimistic, Median and Optimistic was projected for 10 years since drug introduction in the market (2020 in this case).
  • Research on current malaria treatment market and available drugs was conducted to build competitive mapping. Along with inputs from industry experts, dosage, price and market share data across competitive drug types was used to build COGS and overall cost estimates. Value based pricing was also estimated with effects of R&D Tax Credits incorporated in the model.
  • Using market previous drug introductions, and the competitiveness of the drug, the uptake and adoption rate for the new drug was estimated.
  • Finally the Global Net Present Value (NPV) of the client technology was done in a financial model to calculate the indicative license fees under various scenarios.
  • Assessed the risk, barriers to entry and economic benefits of the solution
  • Several rounds of review discussions with client team and refinements to the model were brought by engaging with the technical experts from the client side.

Results / Benefit to Client

  • Comprehensive spreadsheet based automated tool with sensitivity analysis to change inputs and build multiple case scenarios was developed which easy to use for the client to make modifications in the key input parameters including costs for Drug Development Stages, Tax Credits, Stockpile, Raw Material and Conversion costs, Sales & Marketing costs, Tax, Treatment Dose etc.
  • NPV of the drug and indicative licensing fees, along with several insights generated, served as conclusive guidance to the client for deal-making and negotiations.
  • The client was impressed by the quality of the deliverable and particularly appreciated the sound, research backed assumptions and projections.
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