The Problem
A private investment group was considering a $5MM investment in a publicly-traded medical device company. The company had both technologies on the market and technologies in development. While the terms of the investment were attractive and management’s projections promising, the investment team needed help. They lacked both the technical expertise to assess management’s claims about its technology and the regulatory expertise to assess management’s enthusiastic perspective on its regulatory prospects. The investment opportunity was time-sensitive, so the investors needed reliable and actionable diligence quickly.
Our Actions
Our team was retained to conduct a complete 360° SWOT analysis of the company based upon SEC filings, a company-provided deal room, conversations with clinical subject-matter experts, iterative interviews with management, and additional documents we requested as a result of our investigation. Our analysis included:
- An independent market analysis of each of the portfolio technologies;
- A regulatory, technical, and clinical risk analysis of each of the development-stage portfolio technologies;
- A market strategy analysis of each of the market-ready and post-market technologies;
- An analysis of the strengths and weaknesses of the management team;
- A review of the financial statements and a cash flow analysis;
- An analysis of company position at present, and projections in Year 2 and in Year 5 after investment; and
- A recommendation of how to bundle complementary products into a more compelling offering to customers.
Outcome
Based upon our analysis, the investment team was able to confidently establish a valuation floor and ceiling for the company, which led them to make the investment. Our recommendations provided the basis for strategic marketing changes and also provided a roadmap for improved regulatory strategy. Furthermore, our analysis provided budgetary guidance to decrease unnecessary burn, increasing runway and reducing the need for follow-on investment. With the investors’ capital, the Company secured FDA clearance for one product and began EU sales.
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