Mon, Dec 28, 2015

Supporting Restructuring and Capital-Raising by an Early Stage Pharmaceutical Company

The Situation
With its lead drug nearing launch and a robust research and development pipeline, our client needed to value its U.S., Japanese, and European operating companies to support its plans to restructure the company and raise additional capital. 

The Solution

We valued the operating companies based on an income approach that considered potential therapeutic indications for the drugs under development, and for each, the technical, regulatory, and commercial uncertainties. The valuations were benchmarked for reasonableness based on a market approach with reference to comparable companies.

The Result
Management gained a deep understanding of the operating companies’ value and a solid basis for decisions on the terms of the company restructuring. 

The Duff & Phelps Difference

We provided a realistic and well-supported valuation despite the large number of products in development and substantial uncertainties surrounding whether they would ultimately launch, and at what level of market success. The results supported a fairness opinion we provided for the U.S. company’s acquisition of the Japanese and European companies. Our detailed analyses of each pipeline product enabled us to quickly update our valuation to reflect new developments such as changes to the competitive landscape and clinical trial results for each product. This flexibility helped our client to quickly understand how the value of its business changed when key develpments arose, and we were able to provide the company with advisory assistance during several follow-on capital raising events.  We were later able to provide assistance to our client as they grappled with issues such as transfer pricing and due diligence, thanks to the broad capabilities of the Duff & Phelps life sciences industry team.

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Valuation Services

When companies require an objective and independent assessment of value, they look to Kroll.