0. Due Diligence: The Unsung Hero in the Deal Process
Presented to:
The DO’s and Dont’s
Health Advances, LLC • 9 Riverside Road • Weston, Massachusetts • USA
tel: • fax:
CONFIDENTIAL
February, 2009

1. Marie Schiller, Partner, Health Advances LLC
The Panel
Marie Schiller, Partner, Health Advances LLC
Clare Fisher, Snr. Director, Oncology Business Development, Genzyme Corporation
Janice Olson, VP of Program Management, Genzyme
Philip T. Chase, VP of Legal, Alnylam Pharmaceuticals, Inc.
Young T. Kwon, Director, New Ventures and Business Development, Biogen Idec

2. Due Diligence: Definition
Legal definition: Due diligence is a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances; not measured by any absolute standard but depends on the relative facts of the special case."
In other words, to a potential acquirer, due diligence means:
"making sure you get what you think you are paying for."

3. Due Diligence The Diligence Team Market Research
Program Management
Legal
Preclinical/ CMC
Finance
Clinical
Due Diligence
Business Development
Regulatory
Commercial
Market Research
Competitive Intelligence
Company Documentation

4. The Seller: Do’s and Don’ts
Centralized, clear communication
View your program through the other company’s eyes
Plan far in advance
Identify weaknesses
Prep key customers
Conduct practice runs
Reactively prepare for diligence
Hide key risks
DOs
DON’Ts

5. The Buyer: Do’s and Don’ts
Challenge every assumption
“Assess the opportunity cost to your own organization”
Focus on competitive intelligence
Quickly identify most sensitive inputs
Assess the burden to your own R&D organization (what “clean-up” work will we have to do?)
Treat it as a creative process
Rely solely on data presented by seller
Change “go” criteria mid-stream
Assume you can quickly shift product development path or positioning strategy
Solely focus on finding the “warts”
DOs
DON’Ts