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Our client has made a platform for various disease areas in various therapeutic areas (oncology, tropical diseases, blood diseases, immunology).
The medical device is tested and is in validation phase.

The request is to make an assessment of an optimal portfolio of applications for the medical device.

The economics of an application include Sales revenues, COGS, Market Access expenses, SGA, R&D expenses, Regulatory Expenses and Royalties.
All applications have different econonomics, probability rates of success and different royalty structures.

We assessed 60 different disease areas with 5 different regions so we had 300 product market combinations which also could vary in time.

The total number of applications was higher, however, we already filtered out several application by using a qualitative filter:Qualitative Filter R&D Life Science

 

The second threshold was the likelihood of success. The success rate was built on the technical, validation and commercial success rates. We used a Monte Carlo simulation to assess the likelihood per disease area:

Likelihood-of-Success With this information we could filter out non essential disease areas and focus on building the optimal portfolio.

The second phase of the project was the optimization of the portfolio on value with the restriction of the access of funding. We already had the financial information of each application which passed the qualitative and quantitative test so setting up an optimal portfolio was from quantitative approach not the hardest thing to do.

The results provided insight in the optimal path of market entry, the funding need (also with likelihood levels), the valuation range, the make or buy decisions of certain technologies (royalties), the needed production capacities and the needed R&D force.