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.
Five Questions Behind Commercial Due Diligence
1. Is the Addressable Patient Population Real?
Start beyond prevalence.
Understand diagnosis, eligibility, referral, treatment patterns, patient identification and the proportion of patients that can realistically enter the treatment pathway.
2. Will the Product Matter Clinically?
Clinical differentiation should be evaluated from the perspective of actual treatment decisions.
Consider not only efficacy and safety, but where the product may fit within clinical practice, what evidence physicians will require and how existing treatment habits could influence adoption.
3. Can Patients Access the Therapy?
Approval does not automatically create commercial access.
Commercial diligence should consider payer requirements, reimbursement, utilization management, specialty pharmacy, patient support, affordability and treatment logistics.
4. Can the Company Reach the Market?
A commercially attractive therapy still requires an executable model.
Evaluate physician concentration, Centers of Excellence, geographic distribution, patient identification, field requirements, Medical Affairs involvement, distribution and support infrastructure.
5. Can the Organization Execute?
The final question is whether the company possesses—or can realistically build—the leadership, capital, systems, capabilities and timeline required to commercialize successfully.
A forecast that assumes capabilities the organization cannot reasonably build is not a credible commercial forecast.
Commercial Due Diligence by Stakeholder
CEO and leadership team
Understand whether strategy and investment assumptions remain realistic.
Board
Evaluate material commercial risks, required capability and readiness.
Investor
Pressure-test assumptions connecting scientific value to commercial value.
Licensing partner
Evaluate whether market assumptions, development strategy and commercialization requirements support the transaction rationale.
Acquirer
Understand commercial opportunity alongside execution risk and organizational requirements.
Related: commercial due diligence, market opportunity assessment, commercial readiness framework and biotech commercial strategy.
Executive opinion paper
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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.
