Pegasi: COGs and Facility Planning

The Ask

An international tools and technology company requested a market analysis of the gene-editing and advanced therapies space as well as a facility buildout plan to manufacture a critical component for gene therapy applications.

The Impact

Pegasi Logo, white and orange

Pegasi’s results were presented to the client and considered within the clients’ portfolio and company mission. First to consider the final materials was the relevant team in charge of implementation, to ensure an internal alignment of expectations across the responsible project managers and the corresponding in-house technical experts. The results also went to senior management to ensure that they had clarity on all decision points necessary to efficiently take the next steps in adding this opportunity to their range of business offerings.

DHC’S Approach

Providing realistic future expectations for the client required an understanding of the many elements at play. DHCs internal experts provided assistance in identifying components that would be involved in the client’s strategy and how they would interact with one another, from market size to facility requirements to regulatory and beyond.

This request also made use of DHC’s proprietary data-modeling platform, known as Pegasi. This platform is flexible, applying customized input to quantitatively describe a range of probable outcomes for a variety of client queries. In this case study, DHC’s Quantitative Modeling team focused on use of the market analyses, COGs assessment, and resource modules of the Pegasi platform.

The client had not previously produced this critical manufacturing component, but they did have experience in a related product and had a clear vision of what percentage of the market they would need to capture and within what time frame in order to meet their related revenue projections.

This clarity allowed DHC to work backwards from the market expectations to arrive at expectations for process and facility necessary to produce the requisite amount of raw material.

The first step in this exercise was to estimate the market demand. Dark Horse conducted a landscape scan in addition to voice of customer surveys to get a clear picture of the current market need and also consider the growth of the market over time. Once the market demand forecast was quantified and target ranges for market penetration over time were applied, the Dark Horse team then had a clear view of the production demand the client could expect for the critical component.

With the demand known, the DHC team identified and quantified the process equipment and infrastructure systems necessary to meet the production demands, then produced a sample facility map outlining production suites and supporting space. Included in this facility map were expected schedules for the multi-phase facility buildout, with the facility expansion aligned to the estimated market growth and market penetration.

The DHC team considered how a manufacturing effort of this size would reside within the client’s current infrastructure, complete with a review of the full complement of labor (how many individuals with which skill sets would be necessary to begin and continue work on a site of this size) down to hazardous materials usage and waste disposal. After modeling the demand, infrastructure, and labor, DHC was able to analyze not only the COGs and anticipated revenue but also the sensitivity of the profit ranges in response to changes in any variable fluctuation.

Due to the evolving nature of the regulatory framework for cell and gene industry in general, and this manufacturing component in particular, it was critical to include a regulatory assessment to complete this exercise. DHC regulatory experts identified regulations currently in place in various markets, provided best practices recommendations, and weighed in on the direction regulatory guidelines may go in the future.

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