Key Takeaways
- Forecast precision does not compensate for weak commercial assumptions.
- Start with patients: prevalence, diagnosis, eligibility, reachability and who manages care.
- Examine physician behavior, competition at launch, access barriers and organizational feasibility.
- Good diligence pressure-tests the story—it does not exist to prove a preferred conclusion.
Biotechnology asset valuations frequently depend upon forecasts extending many years into the future.
The spreadsheet may be precise. The underlying assumptions may not be.
Effective commercial due diligence therefore focuses on the assumptions connecting clinical performance to commercial adoption. PharmaKonsult’s commercial due diligence advisory is built around that discipline.
Start With Patients
Ask what prevalence is, what percentage is diagnosed, how reliable diagnosis is, how many patients satisfy likely treatment criteria, where those patients are, who manages them and what prevents treatment today.
Each answer can materially alter the commercial opportunity.
Examine Physician Behavior
New therapies do not enter a vacuum. Physicians already have habits, treatment algorithms, existing products, beliefs, institutional protocols and concerns.
Commercial assessment must examine what will cause behavior to change.
Examine Competition
Evaluate the market expected at launch—currently marketed products, clinical pipeline, new modalities, potential generics or biosimilars, guideline changes and diagnostic developments.
Evaluate Access
A strong clinical profile may still encounter payer restrictions, prior authorization, step edits, distribution complexity, affordability issues and administrative burden. These factors affect adoption. See also commercial market access strategy.
Evaluate the Organization Required
Sometimes the market opportunity is attractive but the commercialization requirements are substantial. Ask what infrastructure is required, how long it will take to build, what leadership is needed, what it will cost and what execution risks exist.
Challenge the Story
Good commercial due diligence is not designed to kill a transaction. Nor is it designed to confirm management’s preferred conclusion.
Its purpose is to create a more accurate picture of the opportunity and the risks required to capture it—valuable for CEOs, boards and investors using board and investor commercial advisory.
About Joseph McCoy
Joseph McCoy is Founder and Principal Consultant of PharmaKonsult and an executive commercial strategy advisor with more than three decades of pharmaceutical and biotechnology commercial leadership experience across neuroscience, rare disease, endocrinology, institutional healthcare and specialty pharmaceuticals.
