Portfolio Rationalization

Situation

A publicly held biotechnology company had a portfolio of drugs under development all moving forward in the clinical development process. It was clear to the client that they did not have adequate capital to move all the programs forward but they were paralyzed in making a decision in what to do. The Chief Executive engaged BDF to perform a strategic assessment of the business, make recommendations for rationalizing their development portfolio and then provide assistance in maximizing the value of all the portfolio components.

Results

BDF quickly confirmed that company management was correct in their assessment that there was not sufficient capital to drive all the active programs forward to successful completion and commercialization on the timelines they had been projecting to shareholders. Existing debt burden made the possibility of accessing capital markets for either additional debt financing or new equity remote. BDF performed an in depth analysis of the entire portfolio and developed a plan to maximize the value of the portfolio. A priority compound was identified based upon its product and indication characteristics as well as its stage of development. Three others were identified for outlicense to generate additional funds to support the priority compound. Several other programs were either dropped or put on a slow track to a value creation event where they too could be out licensed but without creating an untenable drain on scarce capital and human resources.

BDF led the outlicensing initiative and was able to establish outlicensing agreements for two compounds that generated enough upfront cash to successfully continue the development of the lead compound which was successfully developed through Phase 2 clinical trials and then out licensed at highly attractive terms providing the company with the wherewithal to move additional programs forward.