Deal Analysis

 

Because Information Means Negotiating Leverage

At Objective Insights, we put negotiating power in your hands with our business development deal models. We analyze your company’s product and situation and distill the essential deal elements into a model you can use during real-time partnering negotiations.

 

Using Information to Your Advantage

If desired, Objective Insights can evaluate your product using our product forecasting approach to produce a thorough, documented forecast to support your negotiations.

If you already have a forecast, Objective Insights can directly incorporate your projections in the deal model; these can be easily updated as new information is included.

 

Comprehensive Deal Modeling

Objective Insights deal forecasting models are built around two profit-and-loss statements driven by two different sets of deal terms. This enables your company to directly compare deals based on cash flow and net present value.

Objective Insights has modeled a variety of business development deal situations, including standard product license and joint venture deals, as well as target identification and development deals. We also examine the deal from both your company’s and the potential partner’s perspectives so you can better understand your negotiating partner’s position.

We usually include at least the following factors in deal modeling:

• Revenue lifecycle
• Marketing, sales, and administrative expenses
• Product development costs, timing, and probabilities by phase
• Royalties, milestones, and upfront payments
• Co-promotion and joint venture terms
• Cost sharing and repayment
• Equity investment

 

Evaluating Your Deal

Objective Insights uses Monte Carlo simulation for risk analysis; Monte Carlo simulation allows you to enter a range of possible values for many of the deal variables, so precise estimates are not required for every input. Monte Carlo’s benefit is that it allows your company to see the full range of possible deal results and enables you to estimate the probability of reaching a favorable deal.

We evaluate deal results using a number of measures, including:

• Net present value/Expected value/Risk-adjusted expected value
• Peak annual cash flows and timing
• Maximum cash outlay
• Probability that Deal A’s expected value is superior to Deal B’s
• Probability that Deal A’s cash outlay is less than Deal B’s

 

Objective Insights can assist your company with its partnering negotiations by providing the same kinds of high-quality, sophisticated modeling that large pharmaceutical companies employ. We give you the opportunity to negotiate a better deal with less effort.

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Deal Advisor™

Compare business development deals to find the best terms for your company

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