Leveraging Comparative Evaluation in Due Diligence of Biopharma In-Licensing and Partnering Deals

The biopharmaceutical industry landscape is constantly evolving, and in-licensing and partnering deals are vital corporate strategies for driving innovation, devising new products, and gaining a competitive edge in the marketplace. However, the success of these deals hinges on a comprehensive assessment during the deal-making process. Comparative evaluations are the key tools for ensuring a robust assessment, whether performed during the preliminary appraisal, due diligence, or business case preparation. In this article, we, BiopharmaVantage, a leading provider of licensing and partnering services, explore the importance of comparative evaluations in due diligence for biopharma licensing and partnering deals.

Comparative Evaluations for Licensing: A Benchmarking Approach

Comparative evaluation is a benchmarking practice that is indispensable for biopharmaceutical deal-makers. It entails a thorough assessment of a prospective asset’s performance relative to the market-leading product. It thus enables comparisons to existing market-leading products and helps understand how a prospective asset stacks up against them or other assets in the development pipeline.

The fundamental objective of comparative evaluation is straightforward: for an in-licensed asset to offer a material competitive advantage, the asset under consideration should be superior when compared to the market-leading asset. If outperforming the competition is unachievable, parity aka non-inferiority with top-tier assets might be acceptable. Comparative evaluation facilitates this determination by providing insights into an asset’s relative competitiveness.

Key Components of Comparative Evaluations for Pharma Deals

Comparative evaluations involve a rigorous assessment relative to the market-leading asset or other key assets in development, ensuring a comprehensive understanding of an asset’s competitiveness. The evaluation criteria are multifaceted, encompassing but not limited to the following:

• Asset attributes
• Addressable patient population
• Clinical data
• Differentiation factors

The Process of Conducting Comparative Evaluation for Licensing

Conducting a comprehensive comparative evaluation involves a methodical approach, commencing with a rigorous analysis of marketed products and assets that are in the research and development (R&D) pipeline. Among the marketed assets, the comparison is made to the asset that has the highest market penetration. For the R&D stage assets, the emphasis is typically given to late-stage assets. Once the benchmark asset is identified and agreed upon, data collection and analysis of the asset under evaluation vis-à-vis the benchmark is performed. Generally, the process involves:

• In-depth assessment of asset attributes against the benchmark, assessment of formulation, dosing, administration routes, and other relevant characteristics to identify inherent strengths and limitations of the asset.
• Robust clinical data analysis involving a thorough comparison of clinical study data covering an assessment of efficacy, safety, and tolerability profiles relative to the benchmark, and identification of potential areas of differentiation or vulnerability. The process might require adjustments and deriving new metrics to arrive at a more meaningful comparison.
• The process also covers the identification of target patient populations, the usage of biomarkers and companion diagnostics, and an assessment of the capacity to address unmet clinical needs effectively.

Biopharma assets are relatively ‘fixed’ in nature, which is further reinforced by regulatory guidelines. While several groups assist with commercial aspects, not many are adept at analyzing scientific data. Effective comparative evaluations require translating scientific and clinical findings into business implications in order to embark on value-creating licensing deals.