Due diligence is essential for successful biopharmaceutical investment, helping investors evaluate the true potential, risks, and value of drug development assets, projects, or biotech companies before committing their capital. Biopharmaceutical drug development is complex, highly regulated, and costly, with extended timelines for research, clinical trials, and regulatory approvals. Key components of due diligence include evaluating scientific validity, patent protections, competitive landscape, regulatory hurdles, reimbursement potential, management expertise, and financial health. A thorough examination of these factors enables investors to avoid costly mistakes, identify promising opportunities, and make informed decisions that maximize returns while managing risks.
Beyond determining the investment amount and timing, due diligence is crucial for developing a strategic approach to advance a program to its next milestone or bring a product to market. Speculation without data-backed confidence can lead to significant financial losses. While scientific and technical expertise are pivotal prerequisites for evaluating biopharmaceutical assets and programs, a combination of extensive experience, unwavering integrity, and strategic business insight enhances the likelihood of success and increases potential value of biopharmaceutical products, programs, and organizations.
The expertise required to develop a biopharmaceutical asset is multifaceted and often challenged by unpredictable outcomes and unforeseen obstacles. Investments in clinical development often rely on a ‘fit-for-purpose’ understanding of manufacturing, where quality and performance may still be limited or nascent. While the process of advancing a biopharmaceutical asset to the next development milestone aims to deepen the understanding of its safety, efficacy, and in vivo behavior, the likelihood of technical and regulatory success is best assessed through rigorous due diligence—a comprehensive evaluation that supports well-informed decisions.
Effective due diligence assessments require a holistic evaluation of technical and regulatory merits of chemistry, biology, manufacturing and controls, program planning, manufacturing robustness, analytical method variability, and supply chain efficacy. This integrated approach provides a detailed accounting of technical and regulatory risks, supporting confident decision-making. The most valuable assessments are conducted by seasoned teams with key attributes, including deep expertise and keen insight:
- Extensive product development experience across multiple programs.
- Deep expertise in CMC (Chemistry, Manufacturing, and Controls) and product development disciplines.
- Comprehensive understanding of development planning and program management, from late discovery through clinical development to product commercialization.
- Extensive experience in managing global regulatory risks and aligning with regulatory authority expectations.
- Proficiency in current Good Manufacturing Practices (cGMP) and Good Laboratory Practices (GLP), along with knowledge of globally accepted quality standards.
- Cross-disciplinary alignment on relative technical and regulatory risks and their impact to development plans and timelines.
- Capability to distill a relatively broad spectrum of complex scientific results from multiple technical disciplines and articulate a concise and compelling analysis to deliver a credible technical and regulatory success.
A thorough due diligence exercise identifies issues that may hinder or delay the achievement of product development milestones. It also offers recommendations—and, where appropriate, options—to address technical challenges, correct deficiencies, and reconcile inconsistencies in regulatory expectations among global authorities whose requirements often diverge from one another.
To paraphrase a well-worn industry adage:
Given enough time and money, any product development issues can be solved, but the commercial value of a product decreases when remediation costs increase exponentially, and expediency is extended geometrically.
In today’s competitive landscape, accelerating development timelines are a very high priority. Judicious investment and prioritization to appropriately sequence program objectives enhance the probability of success and the intrinsic value of any pharmaceutical asset. A robust due diligence process is fundamental for making responsible and effective investment decisions.
