We conduct preliminary research and analysis to select candidates for further evaluation. This includes desk research such as reviewing literature and documentation, interaction with companies and with Sectoral's Advisory Network. Finally, we perform a summary model and scenario analysis before selecting the investment candidates
Sectoral next engages in primary research about each investment candidate. This requires intensive management contact and thorough due diligence concerning all aspects of investment candidates (products and technology, intellectual property, scientific expertise, the potential of the drugs/medical devices currently sold or going through the Food and Drug Administration (FDA) or other regulatory approval processes, the competition, business strategy, quality of senior management, financials, and environmental, social and governance [ESG] issues etc.).
Company visits are an important part of our investment process. Sectoral identifies key success factors and analyzes financial statements.
At the end of this phase, we determine which investment candidates merit further consideration.
The remaining investment candidates are then subject to a forecasting process. This part of the process focuses on sales models for key products and the elaboration of prospective financial statements. Sectoral also performs scenario analysis based on various assumptions concerning the key success factors for each investment candidate.