Due diligence for portfolio investments
Case study
ICON has provided due diligence services to a large institutional investment company for more than five years to support them in funding of development opportunities for both drugs and medical devices. For this client, ICON has performed technical evaluations of more than sixty assets across a range of therapeutic areas and modalities. Technical evaluations of assets include an assessment of development risks and the probability of achieving registration and commercial success.
Challenges
As a portfolio diligence service, ICON had to conduct due diligence on four individual GI therapeutic products in different indications and in different development stages, including the filing stage, phases 2 and 3. The team had to consider the relative development risks and return potentials for each asset when balanced across the portfolio.
Solutions
Subsequent to the high-level review, the asset in the filing stage was removed from the portfolio and a deep dive diligence was conducted across the remaining three assets. A bespoke team including preclinical, CMC and GI therapeutic area specialists analysed the investment opportunity through three progressive stages including development and supply chain logistics, regulatory and market positioning.
ICON’s value add
In this case, the client engaged ICON to provide an assessment of a portfolio of four products being developed by a single sponsor in the GI therapeutic area across multiple development phases. We conducted a high-level review to establish whether the opportunity was attractive enough to proceed to a deep dive diligence review. An initial triage stage took just two weeks while wider portfolio diligence was completed in six weeks, allowing the investment company to make a timely, informed decision.
Outcomes
Upon receiving a comprehensive assessment of the triaged portfolio, the client made the strategic decision not to invest as the collective risks did not balance favourably with the potential rewards. The client’s funds were then free for investment in more promising opportunities elsewhere.