The COO of a small pharma company had started to receive licensing term sheets for an asset that MSC had helped value and was interested in comparing differently structured term sheets based on the valuation.
MSC consulted the client about its ideal deal outcome and the type of terms the client was interested in negotiating further. Based on this input, MSC created a management tool for comparing different term sheets. The model provided negotiation flexibility in how to structure the deal regarding geographies, R&D milestones, commercial achievements, sales targets, etc., with a dynamic re-calculation of the total deal value based on the target patient population. In the end, the client chooses the deal partner with the most attractive profile and offer, which turned out to be one of the largest preclinical deals in the area. In addition to scoring a great deal, the model also enabled the company management to perceive its deal strategy in a higher perspective and think more strategically about how much of an asset’s value to capture when deciding to divest anything in its portfolio.