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Investing for Success: Finding the Right Launch Balance – Pharmaceutical Executive

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Syneos Health conducted a survey and executive roundtable of more than 300 industry leaders across biopharma, finance, and advisory executives in small-to-midsized companies to better understand their experiences in launch investment strategy, including launch forecasting; breakeven expectations; timing, levels and drivers of launch and Selling, General & Administrative (SG&A) spend; and key areas of spend. We explored potential reasons why executives tend to underspend, how spend expectations differ by role and experience and how companies can course correct.

Existing experience in SG&A launch spending

We previously published an in-depth analysis of pre-launch/launch-year SG&A spend in a sample of emerging companies launching their first product to understand the threshold of SG&A investment needed to increase the probability of a successful launch. As shown in Figure 1 below, the study found that companies that spent a minimum of 75% of their launch-year forecasted revenue in their pre-launch year (L-1) had higher rates of launch success as defined by achieving analyst consensus forecast.

Not a single company that spent less than 75% of their launch year forecasted revenue in L-1 achieved a successful launch. Excessive overspending didn’t necessarily help either. Less than half (40%) of the companies that spent more than 250% of their launch-year forecasted revenue in L-1 failed to achieve their forecasted revenue potential. The study revealed an L-1 launch spend “sweet spot” in the 75% to 250% range. While companies frequently underspend, investors and advisory professionals who guide biopharma executives on these exact SG&A decisions consider higher levels of spend more appropriate.

  • Underspending is the norm, but finance/advisory professionals expect more. Company executives are more conservative in their spend expectations than are financial/advisory professionals.
  • Three years prior to launch, a little more than one-third (38%) of the biopharmaceutical executives expect to spend greater than 50% of projected launch-year revenues, compared to more than two-thirds (68%) of finance and advisory professionals—a 30% gap between the two groups.
  • Two years prior to launch, slightly more biopharmaceutical executives (49%) expect SG&A spend at the greater than 50% level, compared to three years prior to launch. The finance and advisory professionals spend at L-2 stays roughly the same (67%), which reduces the gap slightly between the two groups (compared to L-3) but remains significant—in this case, 18%.

This difference may be due to an inclination on the part of biopharmaceutical executives to hedge development risk by tying spending to expected development and financial milestones, such as clinical program progression, fundraising and partnering agreements, and regulatory filing acceptance/ approval. Stage-gating is an industrywide practice, and a high proportion of biopharmaceutical executives in our survey (78%) indicated they have delayed launch spend due to a stage-gating strategy. However, it can be challenging to “catch up” in spending after milestones are met, potentially resulting in an inefficient use of resources and a shorter planning window available around launch. The runway from investment to approval might be as short as six months, leaving little time to sufficiently lay the groundwork and prepare the market for product entry and market access, especially for more innovative or potentially practice-changing therapies.

Executives may have low pre-launch spend expectations for other reasons, too—for example, if they perceive there will be difficulty making the business case for investment; if they experience challenges in their ability to demonstrate cash management abilities to the company’s board and investors; or if they have other priorities given their assessment of product potential or its place in their overall corporate strategy.

More launch experience associated with higher spend expectations

We also assessed to what degree biopharmaceutical executives’ pre-launch spend expectations might be influenced by their previous launch experience. As shown in Figure 2 below, we found those who had launched at least three products are not only willing to spend more each year pre-launch than their less experienced counterparts, but also tend to invest more appropriately. Specifically:

  1. Launch Experience: Executives with experience launching just one product do not expect to spend enough to meet the >75% threshold in L-3 and L-2 prior to launch; just 6% of them expect to spend sufficiently in L-1.
  2. Launch Experiences: Executives with two launch experiences expect to spend more, but less than still is optimal because they are not starting to spend sufficiently until L-2.
  3. Launch Experiences: Executives with three launch experiences expect to spend more optimally by doing so earlier in L-3 as they begin engaging with and preparing the market, and they continue to invest through L-2 and L-1.

Course-correcting for optimal pre-launch investment

Our research suggests that it is wise to challenge assumptions and reset expectations when it comes to pre-launch SG&A investment, both with regard to the timing of certain activities and levels of investment needed to increase the odds of commercial success. Strategies include:

  • Clearly define the opportunity and critical success factors: This is critical, and yet companies often lack the robust insights required to build a strong business case to use with investors. To address this, companies should look to gain a firm understanding of the market by conducting a scenario-based opportunity assessment, conducting it early and updating it as conditions change.
  • Align launch investment with corporate strategy and product potential, earlier in the process: Have a good sense of market dynamics and product potential in order to make targeted investments to pull forward the strategy. Certain market-shaping activities, such as disease-state education and awareness programs, conducting appropriate and early primary and secondary market research with KOLs, HCPs, payers, and patients, as well as peer-to-peer programs, require a longer runway, and the efforts and investment can pay dividends at launch.
  • Reassess pre-launch investments over time: Be prepared to challenge assumptions about what spending levels should be at key clinical, regulatory and financial milestones, backed by comprehensive market analysis and launch expertise.
  • Explore synergistic partnerships: Teaming up with other organizations can help secure additional funding while offsetting any perceived development risks and supports the sharing of critical knowledge and resources. This could include partnerships with other companies in similar therapeutic areas with common interests.
  • Surround yourself with launch experience and expertise: Build a team that is experienced in the market and has launch experience in a similar therapeutic area. Look outside the company for third-party perspectives and partners who can bring in best practices and case studies from other launches in order to avoid costly missteps early on.
  • Invest more resources upfront in breaking down silos and integrating strategic planning across functions: Plan to integrate strategic imperatives across the various functions and key stakeholders in the market. Clearly identify how each activity can be mapped back to the strategic imperatives and outline the level of resourcing required to successfully complete those activities.
  • Define the impact of delaying spend: It is critical to clarify the strategic choices the organization is making in delaying spend and what tradeoffs are taking place as a result. This will help identify priority areas for investment and create transparency if the product does not capture full value.
  • Schedule formal check-ins with your executive team and Board: Having formal check-ins to review the spending strategy can help identify potential reasons for deviation, such as changes in the competitive and market access landscape or new market research insights, and support investment to take corrective action.

Conclusion

Risk is inherent to the business of drug discovery, and clinical-stage companies launching their first product have an acute awareness of this fact. This, in part, helps explain why many companies either underfund launches while hedging bets on their product’s potential, or attempt to play catch-up too late in the game and end up incurring unnecessary costs that add little incremental value. Keeping the above strategies in mind—which will involve thoughtfully challenging a few assumptions about pre-launch SG&A spend along the way—can help emerging, clinical-stage companies spend more appropriately and strategically, thus increasing their potential for launch success.

Naveen Murthy, Senior Managing Director, Head of Product and Franchise Strategy, Sachin Purwa, Michael Sarshad, Directors, Scott Coons, Launch Manager, all with Commercial Advisory Group, Syneos Health Consulting

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Sudbury med-tech firm lands $8M in investment funds – Northern Ontario Business

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Rna Diagnostics has received investment capital that will enable it to complete a clinical trial on its cancer diagnostic tool, the RNA Disruption Assay.

The Sudbury-based med-tech startup announced on Sept. 9 that it’s received $8 million from a group of investors, led by iGan Partners, a Toronto-based venture capital firm, and the Crown corporation BDC Capital.

That money will enable Rna Diagnostics to complete its trial, called the breast cancer response evaluation for individualized therapy (BREVITY), which began in 2018.

“The continued support of iGan Partners and our current investors, combined with the support of BDC Capital as a new investment partner, is exciting,” said John Connolly, president and CEO of Rna Diagnostics, in a news release.

“The closing of this series A financing will allow us to complete the pivotal validation trial (BREVITY) of the RNA Disruption Assay™ (RDA)™. BREVITY is currently recruiting patients at over 40 breast cancer centres in Europe and North America.”

IGan led the way during an earlier round of funding, in 2018, worth $5 million. Rna Diagnostics has additionally received funding through the Northern Ontario Heritage Fund, FedNor, the Northern Cancer Foundation, and the angel investment firm Northern Ontario Angels.

The RNA Disruption Assay determines whether a patient’s tumour is responding to cancer therapy five weeks into treatment.

If the patient’s tumour isn’t responding, the oncologist can change course, cutting down on lost treatment time and considering other treatment methods that may be more effective.

Rna Diagnostics believes this approach could reduce harmful side effects for patients and improve their chances of survival. It could also reduce costs for cancer treatment centres.

“This is an enormous, expensive problem for cancer centres,” Connolly added. “Typically, in solid tumour cancers, only 30 to 40 per cent of patients receive a survival benefit from a given drug regimen.”

The RNA Disruption Assay was discovered by Dr. Amadeo Parissenti, a researcher and professor at Laurentian University, in 2007.

In moving the test towards commercialization, Parissenti later founded Rna Diagnostics, which operates out of Sudbury’s Health Sciences North Research Institute, the research arm of the local hospital, Health Sciences North.

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India likely to block Chinese investment in insurance giant LIC's IPO -sources – Financial Post

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NEW DELHI — New Delhi wants to block Chinese investors from buying shares in Indian insurance giant Life Insurance Corp (LIC) which is due to go public, four senior government officials and a banker told Reuters, underscoring tensions between the two nations.

State-owned LIC is considered a strategic asset, commanding more than 60% of India’s life insurance market with assets of more than $500 billion. While the government is planning to allow foreign investors to participate in what is likely to be the country’s biggest-ever IPO worth a potential $12.2 billion, it is leery of Chinese ownership, the sources said.

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Political tensions between the countries rocketed last year after their soldiers clashed on the disputed Himalayan border and since then, India has sought to limit Chinese investment in sensitive companies and sectors, banned a raft of Chinese mobile apps and subjected imports of Chinese goods to extra scrutiny.

“With China after the border clashes it cannot be business as usual. The trust deficit has significantly widen(ed),” said one of the government officials, adding that Chinese investment in companies like LIC could pose risks.

The sources declined to be identified as discussions on how Chinese investment might be blocked are ongoing and as no final decisions have been made.

India’s finance ministry and LIC did not respond to Reuters emailed requests for comment. China’s foreign ministry and commerce ministry did not immediately respond to requests for comment.

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Aiming to solve budget constraints, Prime Minister Narendra Modi’s administration is hoping to raise 900 billion rupees through selling 5% to 10% of LIC this financial year which ends in March. The government has yet to decide on whether it will sell one tranche of shares seeking to raise the full amount or choose to seek the funds in two tranches, sources have said.

Under current law, no overseas investors can invest in LIC but the government is considering allowing foreign institutional investors to buy up to 20% of LIC’s offering.

Options to prevent Chinese investment in LIC include amending the current law on foreign direct investment with a clause that relates to LIC or creating a new law specific to LIC, two of the government officials said.

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They added that the government was conscious of the difficulty in checking on Chinese investments that could come indirectly and would attempt to craft a policy that would protect India’s security but not deter overseas investors.

A third option being explored is barring Chinese investors from becoming cornerstone investors in the IPO, said one government official and the banker, although that would not prevent Chinese investors from buying shares in the secondary market.

Ten investment banks including Goldman Sachs, Citigroup and SBI Capital Market have been chosen to handle the offering.

($1 = 73.8200 Indian rupees) (Reporting by Aftab Ahmed and Manoj Kumar in New Delhi, Nupur Anand in Mumbai; Additional reporting by Beijing Newsroom; Editing by Sanjeev Miglani and Edwina Gibbs)

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ImpactAssets Strengthens Investment and Client Engagement With Three Strategic Promotions – Yahoo Finance

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Appointments reflect rapid growth as impact investments surge 60 percent and grants jump 76 percent in 2020.

Northampton, MA –News Direct– ImpactAssets

BETHESDA, Md., September 22, 2021 /3BL Media/ – ImpactAssets, a leading $1.6 billion impact investing firm, announced three promotions across its investment and business development teams:

  • Sandra Osborne Kartt, CFA has been promoted to Managing Director, Investments

  • Nick Peters has been promoted to Director, Investments

  • Deb Parsons has been promoted to Managing Director, Business Development

The promotions follow a rapid growth of the firm’s leading-edge impact investment offerings for individuals, advisors, foundations, corporations and other partners. In the face of the COVID-19 pandemic, ImpactAssets and its clients made 220 investments in funds and companies that are having a transformative impact on people and planet, totaling $415 million in impact investments. Clients also doubled down on their commitment to solving the world’s greatest challenges, generously giving $181 million in grants, a 76 percent increase.

CEO and Chief Investment Officer Margret Trilli said, “I am thrilled to announce these well-deserved promotions. Sandy and Nick have each been vital in building a best-in-class lineup of impact investments, leading the team in completing 21 due diligences last year, and Deb has been instrumental in strengthening top tier service amidst explosive growth in new clients. With continued expansion in our impact investment and charitable activity, I am tremendously excited to see what they will accomplish next.”

Sandra Osborne Kartt, CFA

As Managing Director of Investments, Sandra manages the team responsible for sourcing, due diligence and selection for investment options spanning asset classes and impact themes. With expertise in social equity and microfinance, she oversees the ImpactAssets’ Impact Notes Program. Prior to joining ImpactAssets, Sandra served as a Risk Officer at Developing World Markets, an impact investment asset manager focused on linking the capital markets and financial institutions serving the bottom of the pyramid in emerging and frontier economies. She also worked at Keefe Bruyette & Woods, a boutique investment bank, as a sell-side equity research analyst covering the U.S. banking industry. Sandra holds an MA in Economics from New York University, a BS in Economics from Louisiana State University, and is a Chartered Financial Analyst.

Nick Peters

Nick’s new duties as Director of Investments include overseeing the sourcing, due diligence and selection of investment options with expertise in Climate Solutions. Prior to ImpactAssets, Nick was on the investment teams at AiiM Partners and Factor[e] Ventures, where he led investments in early and growth stage investments delivering positive environmental and social change. He also worked as a Financial Fellow at Project Drawdown, where he focused on financial and impact modeling of climate solutions, mobilizing climate-friendly capital, and launching a new global modeling platform. Nick holds an MBA from the Haas School of Business at UC Berkeley and graduated Phi Beta Kappa from UCLA with a BA in Economics and International Studies.

Deb Parsons

As Managing Director of Business Development, Deb leads all client engagement and business development at ImpactAssets. She has 15+ years working with investors, donors and large-scale initiatives to create positive social and environmental change. Deb has played key roles in consulting projects focused on bringing together disparate stakeholders for a common good with specific focus on gender and racial equity. She has worked in both the for-profit and nonprofit sectors across impact areas. Deb holds an MBA from Kenan Flagler Business School, UNC Chapel Hill, where she was a Carolina Venture Fellow.

About ImpactAssets

ImpactAssets is the leading impact investing partner for individuals, families and philanthropists tackling the world’s greatest challenges by investing in the world’s brightest ideas. We make it easy for our clients to “discover, connect and invest” in game-changing entrepreneurs and funds. Founded in 2010, ImpactAssets increases flows of money to impact investing with our 100% impact investment platform and field-building initiatives, including the IA 50 database of private debt and equity impact fund managers.

The ImpactAssets Donor Advised Fund is an innovative vehicle that empowers donors to increase the impact of their giving by combining it with strategic, sustainable and responsible investing to build a sophisticated philanthropic endowment. The Fund currently has more than $1.6 billion in assets in 1,700 donor advised funds, working with 350 wealth advisors across 60 financial services firms.

ImpactAssets is headquartered in Bethesda, with offices in New York City and San Francisco. Learn more at https://www.impactassets.org/ImpactAssets

View additional multimedia and more ESG storytelling from ImpactAssets on 3blmedia.com

View source version on newsdirect.com: https://newsdirect.com/news/impactassets-strengthens-investment-and-client-engagement-with-three-strategic-promotions-254721102

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