QUATTRO IN ACTION

NEUROLOGY-PSYCHIATRY

Should a client acquire/license a potentially promising new drug?

CLIENT

BUSINESS DEVELOPMENT TEAM OF LEADING BIOPHARMACEUTICAL MAKER

The CEO and business development team of a leading biotech company were considering a potential acquisition or licensing deal.

The target company was developing a drug that seemed to offer good synergy with our client’s main physician customers and patient groups. Wall Street analysts were optimistic about the drug based on its Phase 3 results, although the drug was not yet approved.

Preliminary investment banker feedback indicated that the transaction could make financial sense, although the stock was nearing an all-time high. However, there were lingering uncertainties about the drug itself and how broadly physicians would actually use it.

QUATTRO WORK

Quattro gathered detailed feedback from over a hundred physician specialists to map current medication usage according to stage of disease.

Then for the new medication, Quattro gauged the magnitude of realistic adoption and usage for each patient type within each physician segment, given how physicians perceived the relative strengths of the drug.

RESULTS

$300MM

Client avoided loss, which would have arisen form an underperforming investment

Quattro’s research confirmed that the new drug would likely enjoy good adoption in select segments.

However, despite the seeming advantages of the medication, the segment-by-segment analysis also revealed that overall physician usage would not be widespread enough to drive major growth.

Quattro recommended against pursuing the opportunity, even though most Wall Street analysts were still optimistic. In the short run, the stock continued to rise while the drug was initially launched; however, within a year, growth failed to materialize. The prior target company lost more than 60% of its original value.