See how Kx Advisors determined a franchise-optimized unit price point for a clinical-stage biotech company’s multiple-indication asset to maximize long-range cumulative net income.
The Problem
After building a detailed long-range plan (LRP) model for a clinical-stage biotech company, Kx Advisors was approached by the same client with a unique pricing challenge. The company needed to determine an optimal pricing strategy across all indications for which its leading pipeline asset was being studied. Because of the asset’s clinical performance, likely position in the treatment algorithm, and value differed for each indication, Kx was tasked with creating a pricing strategy and roadmap to maximize the asset’s long-term value across all clinical programs.
How Kx Helped
Kx Advisors delivered a unique, tailored pricing strategy for the client that more than doubled the asset’s forecasted, cumulative net income over the 10-year LRP period. Kx kicked off this analysis by conducting in-depth interviews and fielding a quantitative electronic survey with KOLs, high-volume prescribing physicians, and payers to evaluate the asset’s value and optimized “isolation price” in each indication. Using the outputs from primary research, Kx built a price elasticity model integrated into the client’s LRP that demonstrated the impact of price on market share, utilization management restrictions imposed by payers, and patient adoption and willingness to pay. In addition to delivering a franchise-optimized unit price point for the client’s asset, Kx also developed an array of 15-20 additional pricing mechanisms and strategies to further elevate the asset’s value across its clinical programs.
