Cases

Strategic Diligence of a Bulk Drug Manufacturing Facility, to Assess an Investment Opportunity

Challenge

A pharmaceutical company has an in-house bulk drug manufacturing facility. The bulk drug business is strategically not important and the pharmaceutical company wants to hive off the facility.

The client is a partner in a bulk drug manufacturing company, which has product synergies with the bulk drugs manufactured by the pharmaceutical company. The client has been given an offer to take over the management and operations of the pharmaceutical company’s bulk drug facility. It thus requested UC to conduct a strategic diligence of the bulk drug business.

Our Approach

To conduct the strategic diligence, UC approached in the following manner:

  • Analysed the capacity utilisation of the bulk drug plant - product wise production and in-house consumption and sales
  • Conducted secondary search and primary research

    1) Analysed the sales trend of formulation products and assessed the future outlay of each therapeutic segment

    2) Established a perception about the quality and technology of the bulk drug facility from the customers

  • Assessed the product synergy between the two bulk drug manufacturing outfits
  • Suggested a revised product portfolio indicating priorities -

    1) Introduction of new bulk drugs

    Transfer of products from the bulk drug plant the client is associated with new products

     2) Discontinuing some of the existing bulk drugs

  • Documented a brief business plan

    1) Product portfolio

    2) Assessment of strengths of the bulk drug facility

    3) Assumptions and high level financial.

Impact

UC delivered its recommendations and the diligence report to the client, aiding them in making a decision.