Case studies

Case study 1: Partner negotiations

Challenge:

The client was starting up partner negotiations based on strong patent rights for a diagnostic test. The market situation was rather complex because the test could be performed in different ways by various partners and the client wanted to keep access to part of the market. Furthermore, the test could cover various patient groups depending on guidelines and market strategies. The client’s existing valuation model was unable to handle the complexity of the market.

Xplico’s approach:

We set up Xplico Evaluator with three different patient pools and three different test types covering the worldwide market divided into four regions. Furthermore, we took into account that the client wanted access to the relevant part of the market.

Results:

Based on the set-up, we were able to answer all relevant questions asked by the client without doing any remodelling. The client was able to see the value for each patient pool, region and test type as well as totals and subtotals. Furthermore, the client could see the value split between them and the partners based on various deal terms. We ran various scenarios, enabling the client to see the effect of changed assumptions.

Client feedback:

“The Xplico valuation tool has been helpful in visualizing the rather complex market situation and has added valuable analysis data to the process. Xplico has shown good market knowledge and given fast and valid support.”

Case study 2: Evaluating proposed deal terms

Challenge:

The client received a proposal from a possible partner for a specific compound. The client wanted to evaluate the proposal and, if it proved interesting, prepare for further negotiations.

Xplico’s approach:

We set up Xplico Evaluator based on the market potential for the compound and the proposed deal terms, then ran various scenarios to show the effect of changed deal terms and assumptions.

Results:

The client entered into further negotiations and signed a partner agreement with improved deal terms.

Client feedback:

“Xplico Evaluator gave us the necessary overview and analytical power to challenge and optimize the proposed deal terms. Use Xplico as your sparring partner; they gave us fast and valid feedback, and there are many years of real-world experience to learn from.”

Case study 3: Portfolio analysis

Challenge:

The client had decided to perform a strategic review of their existing portfolio of development projects. The client needed comparable risk-adjusted valuations of each project in the pipeline.

Xplico’s approach:

We set up Xplico Evaluator for each project in the pipeline based on the existing information. We identified the areas for improvement for each project, including assumptions that needed further justification. We then ran various comparable scenarios for each project based on updated information.

Results:

Based on our valuations, the client chose the projects that would generate most value for the shareholders.

Client feedback:

“It was really important to have a tool that facilitates communication based on comparable project valuations. Having a solid and consistent process helped to lend a sense of confidence to the team that was performing the strategic portfolio review. In addition, we enjoyed Xplico’s expert support. Xplico quickly validated our efforts and supported us when needed.”

Case study 4: Company valuation

Challenge:

The client has been requested by his board to come up with an external company valuation within a short timeframe to be used in connection with a funding round/grant of stock options.

Xplico’s approach:

We calculated the enterprise value (EV) as sum of the parts meaning that we evaluated the company asset by asset using Xplico Evaluator. We collected the relevant information for each asset from our databases, the client and network. We estimated the value for each asset and in total based on this information and compared these values with similar deal values. We also ran various sensitivity and scenario analysis to identify value drivers and the overall sensitivity. Before issue the final valuation report the client got the opportunity to review the report for factual inaccuracies.

Results:

The client got a well-structured and transparent company valuation based on the assets of the company.

Client feedback

“Xplico has during a short time frame delivered a high quality valuation report on time and in line with the agreed terms. They have shown good understanding of the market complexity and the market potential of our products.”