Sign in Subscribe
4 min read

Guide to Critically Assessing Early-Stage Pharma and Biotech Pitch Decks

Guide to Critically Assessing Early-Stage Pharma and Biotech Pitch Decks
Photo by Bernd 📷 Dittrich / Unsplash

1. Pricing and Reimbursement Pressures

1.1 Early Pricing Negotiations

  • The New Reality:
    • Payers and HTA bodies, particularly in Europe, are scrutinizing clinical trial data earlier
    • Example: In the EU, HTA bodies involved in the Joint Clinical Assessment (JCA) may assess early efficacy data to predict pricing feasibility. Similarly, the US Inflation Reduction Act (IRA) pressures high-cost therapies likely to fall under Medicare price negotiations to justify value earlier.
    • Evaluator’s Focus:
      • Does the pitch address these early payer engagements?
      • Has the company begun generating data (e.g., health economics, quality-adjusted life years [QALYs]) that aligns with payer expectations?

1.2 Preparing for Pricing and Reimbursement

  • Common Oversights:
    • Many companies prioritize clinical endpoints over market access readiness, assuming pricing discussions occur post-approval.
    • Example: A startup presenting a high-cost gene therapy may highlight efficacy without addressing payer concerns about affordability and cost offsets.
    • Evaluator’s Focus:
      • Does the pricing strategy align with payer-imposed thresholds (e.g., ICER in the US or NICE in the UK)?
      • Have access barriers, like step therapy or prior authorizations, been considered?

2. Using EVT to Address Clinical and Market Challenges

Extreme Value Theory provides a structured way to analyze rare, high-impact events, ensuring that both clinical and financial risks are thoroughly evaluated.

2.1 Clinical Data Insights

  • Safety Monitoring:
    • EVT models tail risks, such as severe adverse events (SAEs) or dose-limiting toxicities (DLTs), and quantifies their impact.
    • Example: In a CAR-T therapy trial, EVT might highlight cytokine release syndrome risks, enabling dose adjustments or trial redesigns.
    • Evaluator’s Focus:
      • Are safety thresholds meaningful and validated by clinical relevance?
      • How do these risks impact cost-effectiveness and trial design?
  • Efficacy Variability:
    • EVT identifies extreme responders (e.g., patients showing complete tumor regression) who may define subpopulations for targeted therapies.
    • Example: A rare subset of responders in an oncology trial might justify a biomarker-driven expansion cohort.
    • Evaluator’s Focus:
      • Does the pitch link extreme outcomes to potential pricing and subgroup targeting?
      • Are results consistent across trial sites?

2.2 Linking Early Clinical Data to Reimbursement

  • Translating Phase 2 Data for Payers:
    • EVT bridges early efficacy or safety signals with payer metrics like QALYs or long-term health cost savings.
    • Example: A therapy showing improved patient-reported outcomes in Phase 2 could strengthen pricing discussions with HTAs.
    • Evaluator’s Focus:
      • Does the company understand how early data informs reimbursement strategies?
      • Are health economic models included in planning?

3. Spotting Weaknesses in Market Access Preparation

3.1 Pricing Readiness

  • Common Gaps:
    • Companies often present premium pricing expectations without evidence of value or cost offsets.
    • Example: A gene therapy targeting rare diseases may assume a $2 million price per patient but fail to demonstrate long-term savings for payers.
    • Evaluator’s Focus:
      • Are pricing assumptions backed by robust economic modeling?
      • Has the company addressed payer resistance to high-cost therapies?

3.2 Regional Reimbursement Challenges

  • Fragmented Markets:
    • Differences in reimbursement frameworks across countries can delay or stagger market entry.
    • Example: A diabetes therapy might pass NICE’s cost-effectiveness test in the UK but face rejection in Germany due to budget constraints.
    • Evaluator’s Focus:
      • Does the pitch outline strategies for navigating regional HTA variability?
      • Are market entry timelines realistic, given local payer dynamics?

4. EVT’s Role in Identifying Strategic Pivots

4.1 Pivoting Indications

  • Opportunity:
    • EVT identifies rare safety or efficacy outliers that justify focusing on high-value subgroups or orphan drug indications.
    • Example: An oncology drug with modest overall efficacy may demonstrate strong results in patients with a specific mutation, warranting a biomarker-driven pivot.
    • Evaluator’s Focus:
      • Has the company considered alternative indications based on extreme data?
      • Are pivots supported by validated analyses?

4.2 Trial Design Adjustments

  • Adaptability:
    • EVT supports trial redesigns to mitigate risks or capitalize on extreme efficacy signals.
    • Example: Adjusting endpoints to capture super-responder benefits or refining dose levels to reduce toxicity.
    • Evaluator’s Focus:
      • Are proposed trial modifications aligned with emerging data trends?
      • Is flexibility built into the trial protocol to address payer and regulatory needs?

5. Identifying Red Flags in Pitch Decks

5.1 Over-Simplified Data

  • Common Practice:
    • Companies may present aggregated metrics (e.g., medians or means) that obscure variability or outliers.
    • Evaluator’s Focus:
      • Are data distributions shown, including outliers?
      • Are safety and efficacy trends contextualized properly?

5.2 Unrealistic Projections

  • Common Practice:
    • Overly optimistic timelines or revenue estimates that ignore potential delays, costs, or payer resistance.
    • Evaluator’s Focus:
      • Are timelines and financials stress-tested for delays or pricing pressures?
      • Are assumptions about reimbursement or market entry credible?

5.3 Lack of Transparency

  • Common Practice:
    • Omitting outlier results or selectively presenting favorable data.
    • Evaluator’s Focus:
      • Are data subsets (e.g., dose groups) analyzed separately?
      • Is the variability in biomarker or safety data fully disclosed?

6. Asking Critical Questions to Spot Weaknesses

  1. Pricing and Reimbursement:
    • Does the pitch address early payer engagement and the impact of Phase 2 data on potential reimbursement?
    • Are pricing assumptions aligned with payer expectations?
  2. Clinical Risks:
    • Are extreme safety events modeled using validated thresholds?
    • Are efficacy outliers explored for subgroup targeting?
  3. Market Access Strategy:
    • Is there a plan for navigating regional HTA variability?
    • How are payer restrictions (e.g., step therapy) addressed?
  4. Financial Viability:
    • Are funding projections robust enough to accommodate delays and expanded costs?
    • Has the company accounted for the expense of generating payer-relevant data?

Conclusion

The evolving demands of the pharma and biotech landscape require early-stage companies to integrate pricing, reimbursement, and market access considerations much earlier in their development plans. Extreme Value Theory (EVT) offers a unique lens to uncover hidden risks and opportunities, ensuring a detailed understanding of tail risks in safety, efficacy, and financial projections. Evaluators should use EVT to probe areas that startups often overlook, enhancing decision-making and fostering a more realistic and actionable approach to drug development.

Published by:

Sebastian Gensior

Member discussion