The field of biotechnology is a rather specific area of business activity. That is why conducting due diligence for companies in this industry needs to be done with particular care and diligence. If you are afraid that you may miss something important in the process, we offer you a small biotech due diligence checklist that will help you avoid embarrassing mistakes in the due diligence process, and tell you what to keep in mind when conducting due diligence for biotech companies.
How to conduct due diligence for biotech companies: a step-by-step guide
To ensure that your biotech due diligence assessment is not only done correctly, but also effectively, we suggest using our tips on how to organize the process using the appropriate software:
- Assemble your dream team. Without solid support from your employees, you won’t be able to realize all of your goals. Of course, it is not possible to gather such a team in a few days, so the search for qualified specialists should be continuous. In case the company needs qualified employees right now, you can ask for help from specialists who provide outsourcing services.
- Choose a reliable virtual data room. It’s nearly impossible to run a business these days without proper software, so experts also recommend spending a little more time and finding just the right virtual platform that will maximize the performance of the entire company.
- Make as many items on your checklist as possible. Due diligence is just the case when detail is not superfluous. The more items your list has, the better – that way you can protect yourself and fear that you missed something. When making such a list, you can use a ready-made template, but in any case it should always be adapted to each specific transaction.
- Divide information into logical parts. To make it more convenient to classify and use in the process, it is recommended to divide the entire array into several structural parts. Thus, you can divide all items on the list into groups – for example, the assets of the company, the structure of the company, information about the financial condition, indicators of its development and others.
These simple but effective tips will help you conduct due diligence with maximum efficiency. But you should also keep in mind possible pitfalls along the way.
Documents required for due diligence and how to avoid mistakes
The most common types of due diligence for biotech companies include the following types of possible errors:
- Inconsistencies between the data provided by companies and the results of independent due diligence;
- Exaggerated company performance;
- Errors in licensing documentation that affect the distribution of products and the company’s operations.
To ensure that these errors don’t taint the result of due diligence, it’s advisable to keep all necessary documentation in digital form – for example, using virtual data rooms. This way you can not only keep important documents in one place, but also quickly correct them if necessary.