Choosing Between a Founding Platform and a Newer Program

Overview

A public biotech's pipeline consisted of the high-risk platform science the company was originally built on — capital-intensive and reliant in part on outside subsidies to stay viable — and a newer, more conventional clinical program with a more straightforward pathway to regulatory approval. Cash couldn't fund both, and the board and management were divided over which defined the company's future.

What We Did

We ran a comprehensive, probability-weighted portfolio review, working with the scientific, clinical, and commercial teams to align on the timing, cost, probability of success, and revenue potential of every asset. The analysis showed the newer program decisively outperformed the legacy platform, both on return per dollar invested and on its ability to generate near-term value-inflection events. Sensitivity analysis showed how much the founding platform technology would lose in value if government subsidies were to be removed. After multiple meetings at every level, from asset teams to C-Suite to the board of directors, we aligned on a truly “bet the company” decision.

Outcome

The board approved a strategic redirection: divesting the legacy franchise and concentrating investment behind the higher-return program.  While the scientific leaders of the more risky founding technology team did not like the outcome, they could not dispute the key assumptions or the chain of quantitative logic that led to the conclusions, so they ultimately bought in. A few years later, that more conventional but still highly valuable program carried the company to its first FDA approval and commercial launch.