Gx/BGx Manufacturer—Commercial Due Diligence

• Assess the adequacy of Target’s management resources (both extent and quality).
• Assess the organizational structure and decision-making process within Target.
• Assess the quality of Target’s IT, finance, and operational systems for managing Target and reporting on its operational and financial performance.

• An independent assessment of the investment project.
• Revision of the information provided by the Target and the Client.
• In-depth research of the core Target's pharmaceutical market.
• A set of interviews with Target's top management with insights and recommendations.

• assess the Project Cost, including construction and equipment costs and Project Financing Plan;
• assess the appropriateness of technology and equipment suggested by Target, including sources of such technology/equipment and reasonableness of indicative costs;
• review equipment procurement process and draft contracts with key equipment suppliers;
• review draft contract with the main contractor(s) for the construction works;
• assess the lead time for the key components of the Investment Programme;
• verify contingency plans to cover shortfalls;
• provide an assessment of the proposed time-line of new manufacturing capacity becoming operational;
• assess the GMP certification process of Target’s new production facilities;
• review the recent project preparation/implementation status.

• provide a detailed review of Target’s current and planned products (including within its core markets), pricing, margins, and outlook;
• original and generic products driving Target’s sales;
• assessment of Target’s new product development process and in-house research and development (R&D) capacity to develop new original and generic products;
• assessment of Target’s ability to continue replacing non-target's originals (following patent expiring and availability for a copy) with new generic products.

• assess  existing and planned customer base (customer profile), including hospital segment;
• assess customer contracts, their length, volume/price guarantees, termination clauses, and raw-material cost pass-through ability;
• identify the main raw materials and operating costs of the Company, and the main suppliers of these products/services plus any available alternatives;
• identify whether any major contracts are priced below or above market levels;
• analyze inter-company goods and cash flows (including the Company’s existing raw materials supply chains involving off-shore companies) as well as transfer pricing practices and tax arrangements used by the Company;
• analyze cost/price competitiveness of the Company and its ability to maintain it in the future;
• assess distribution channels: effectiveness of proposed channels, trends, key players, and cost justification;
• analyze indigenous and foreign competitors and their respective market shares;
• produce a SWOT analysis;
• comment on existing production facilities, the performance of the existing equipment, utilization rate.

• Review the current and prospective market regulation affecting Target’s operations, including:
• licensing: to confirm availability and validity of Target’s timeless licenses issued by the Ministry of Health also confirming the Target’s compliance with GDP standards; procedures for the confirmation of the license validity by the Ministry of Health;
• product certification/registration process (e.g., regulatory approvals needed, timing for bringing products to market, potential regulatory hurdles, and risks to commercialization of the newly planned products);
• regulation of prices of medicine producers;
• raw materials import taxes and duties;
• supply to state hospitals: key requirements, procedures, contracts, promotion, payment terms, etc.);
• introduction of mandatory medical insurance and reimbursement mechanism;
• the potential of introduction of VAT on medicines and ban on medicine advertising;
• any other regulatory risks.

• Assessment of Target’s strategy, investment program, and business plan.
• Understanding the sustainability of Target’s competitiveness and profitability.
• Study of the industry regulation.
• Analysis of the intercompany goods and cash flows of the Target
• Assess transfer pricing and tax arrangements of Target.
• Study of the quality of the management team, organizational structure, and systems.

To perform Ukrainian Target's core markets analysis:

• evaluate Target’s marketing strategy for its core market, including product mix, pricing policy, logistic and distribution’s channels, advertising/promotion;
• provide recommendations on marketing strategy improvement;
• assess market volume (i.e., size in volume, value terms, and contribution’s margin), market growth rate (i.e., growth trends and assumptions for the period of up to 5 years), key players and their market shares, supply and demand, long-term trends, product substitution, the Target’s existing and potential market share.
• review and  confirm whether existing marketing and sales structure and workforces are  appropriate