How to Perform a Biotech Commercial Assessment

CAR T-cell therapy is a form of immunotherapy that uses specially altered T cells – a part of the immune system – to fight cancer. A simple overview of the process is as follows: a sample of a patient’s T cells is collected from the blood, then modified to produce special structures called chimeric antigen receptors (CARs) on their surface. My colleagues Shailesh Maingi and Mitch Killar provided a more in-depth overview of CAR-T in their white paper, A Primer on CAR-T Cell Therapy.

When these CAR T-cells are reinfused into the patient, the new receptors allow them to identify and attach to a specific antigen on the patient’s tumor cells and kill them. There are currently six approved CAR-T therapies:

• YESCARTA: for the treatment of large B-Cell lymphoma
• KYMRIAH: for pediatric ALL (​​acute lymphoblastic leukemia)
• TECARTUS: for mantle cell lymphoma and B-cell precursor ALL
• BREYANZI: for diffuse large B-cell lymphoma
• ABECMA: for multiple myeloma
• CARVYKTI: for multiple myeloma

The CAR-T market has exploded in the past few years, and while market research reports vary in estimating the market size, they all agree that it is valued at billions of dollars and the growth is explosive (between 30-60%).

There are many hundreds of potential therapies in the discovery phase of development utilizing the CAR-T modality. When choosing a lead indication to prioritize, one critical factor to ensure a potentially life-changing therapy receives appropriate funding to ensure it accelerates through the clinic is the performance of a rigorous biotech commercial assessment.

The standard pharmaceutical business model involves selling relatively cheap-to-manufacture drugs that ameliorate, rather than cure, and are dispensed over a long period of time with large profit margins. CAR-T therapy, on the other hand, is expensive to produce even after approval and is intended to be curative, so it will need to be given once, or only a few times.

Additionally, the specificity of CAR-T therapy means that only a small subgroup of patients with a particular cancer may be appropriate for treatment, making every CAR-T an orphan drug. When combining these factors, it’s understandable why CAR-T therapies, despite the exciting possibilities for positive patient impact, may be unappealing to biotech companies.

While a biotech company at its core is focused on advancing science by progressing clinical programs to provide better care for life-altering diseases, understanding the commercial impact of the lead indication is crucial when raising money to fund and progress the aforementioned programs.

Due to the unique factors of CAR-T therapy outlined above, a commercial assessment is an even more important tool than usual in the toolkit of building a budding therapeutic CAR-T-focused company. The purpose of a biotech commercial assessment is to provide a comprehensive overview of the lead indication’s overall versus addressable market, key customer segments, competitive landscape (including therapies in development) and build a robust, fact-based forecast.

The first step in a biotech commercial assessment is to conduct a thorough assessment of the current situation for the lead indication. This step typically includes evaluating a mix of secondary research reports and conducting primary research. Understanding key factors such as different stages of the disease, currently available standards of care for each stage, and the market size is critical in this step.

Additionally, gathering data on the incidence and prevalence of the lead indication for both the United States (if a US-based company) as well as the seven other major pharmaceutical regions is important as well. Identifying key trends within the lead indication’s market is valuable – recognizing critical headwinds and tailwinds within the rapidly changing market is necessary when getting a ‘lay of the land.’

Upon completing the first step, each constituent of the biotech company should have a clear grasp of the lead indication’s addressable market, headwinds and tailwinds, and current diagnostic and treatment options.

The next step in the commercial assessment is to assess customer segments. Gathering facts and gaining insights into each customer segment within the lead indication is crucial. One phase of this step is identifying Centers of Excellence for the lead indication within the target geography. These centers can be vital advocates for your therapy as it progresses through its clinical programs toward commercialization and can be sources of invaluable data not available elsewhere.

The end result of identifying such Centers of Excellence will look something like this:

Additionally, identifying Key Opinion Leaders (KOLs) within the lead indication is an important part of the customer segment step. Since they are thought leaders within their niche, they can provide a significant impact on the awareness and adoption of your program, as well as potentially serve on your biotech’s Scientific Advisory Board (SAB).

Another important component of the customer segment analysis is understanding handoffs within the care team, especially within Oncology.

A burgeoning biotech company with a CAR-T therapy focused on oncology, for example, may want to investigate and deepen its understanding of when handoffs are made amongst the cancer team for each patient within their lead indication.

After gaining insights into the market and customer segments, conducting a diligent competitive review is the last step of fact-gathering in a biotech commercial assessment. In this section, conducting a clinical pipeline analysis of active trials within the lead indication space is the first step. Segmenting these programs by phase is critical to understand these questions:

• How many early-stage (Phase I) programs are in development? Is this a popular area for biotechs to research?
• Of Phase II active programs, how many are there, and who is sponsoring them? Is it primarily smaller biotechs or large pharma?
• How many late-stage (Phase III) programs are active? These are potential new therapies that could usurp the current standard of care within a short timeframe

This research is typically synthesized from a variety of both publicly available secondary resources (such as clintrials.gov) as well as proprietary databases that Kineticos has carefully curated over the course of its 13 years of operation.

While the purpose of a commercial assessment isn’t to conduct a deep dive into how competitive programs compare scientifically to a biotech’s asset, having a high-level understanding is important. A commercial assessment can answer key crucial questions; questions such as, which companies are using similar methods as the biotech’s and which companies are leveraging novel or proprietary methods?

Finally, after gathering a deep understanding of the market, customers, and competitors, a biotech can begin to build a financial forecast based on the assumptions gathered within the research. Building a flexible financial forecast is based on providing clear data sources, adjustable inputs, and reasonable assumptions. Typically, we recommend three levels of the forecast:

• Low case – this is the conservative case of what biotechs expect their therapy to achieve in revenue
• Base case – what is the reasonable expectation for this therapy when it comes to market?
• High case – optimistically, if many things go right, what is the ideal outcome for this therapy when it comes to the market?

In summary, conducting a commercial assessment provides valuable data sets supporting the journey of every biotech company, but especially for those in fast-growing areas such as CAR-T therapy; which has only six therapies approved, but thousands more that are actively being researched in clinical trials. With a data-driven commercial assessment chock-full of insights on the market, customers, and competitors, biotech leaders can prepare confidently for future investment and partnering strategies that support their clinical studies.