Market Analysis for a Manufacturing Reagent

The Ask

This client was considering acquisition of a company with a critical reagent used in the manufacture of viral vectors. To understand the market opportunity, DHC was asked to estimate current and future market sizes for this material as it pertained to its use in Adeno-Associated Virus (AAV) and Lentiviral Vector (LVV) manufacturing processes. This market size assessment was one piece of a broader diligence project conducted for this client. (Find an example of a full diligence case study here.)

The Impact

In addition to providing comprehensive diligence support, DHC provided a detailed overview of market size for the reagent in question to build a better understanding of whether this potential opportunity aligned with the client’s investment thesis. The analysis performed provided the necessary details—including a consideration of the magnitude of potentially obtainable market share for this target—to allow the client to make a solid data-driven decision on future investments.

DHC’S Approach

Alignment of critical assumptions: DHC compiled key assumptions, including: % of the AAV and LVV markets using this reagent, common price points, and volume requirements of the reagent in standard manufacturing processes. Confirmation of assumptions can be done in collaboration with the client’s previous research (if desired) and often requires a combination of literature research and leveraging DHC’s network of in-house SMEs who have direct experience with these products.
Clinical forecasting: We leveraged external databases to confirm the current number of relevant CGT programs in development using these two vectors, and forecasted that forward for a 5-year period.
Patient population: Our internal modeling capabilities provided an accurate current and approximated-future estimate of the total number of patients being treated using AAV and LVV, and this was used to calculate the amount of vector required to treat that total expected patient population over time.
Market demand: The total patient population and estimated vector required per patient and in total were used to calculate an estimate for total volume of reagent required to serve the market over the forecast period.
Market size: Our project calculated the overall size of the market based on a range of estimated reagent volume requirements and price points, over the forecast period.