Project Uplandcare — Biopharma Strategic Alternatives
A 1.5-hour Healthcare / Biopharma Strategic Alternatives case study with a complete model answer
Modeled After
Leerink Partners
A sell-side strategic alternatives update with no valuation section at all: price expressed exclusively as cash consideration as a percentage of net cash at close, side-by-side offer-evolution grids, a contingent value right set at a share of net proceeds from legacy assets, and a process funnel running from 133 screened parties to two revised proposals
Structure and exhibit set are modeled after Leerink Partners. The company, the financials and every figure in this case are entirely our own.
The Situation
Uplandcare Biosciences, Inc.
Uplandcare Biosciences, Inc.
- Sector
- Biopharmaceuticals — clinical-stage, no approved product, no revenue and no earnings; one terminated Phase 3 program in ulcerative colitis, one out-licensed program in IgA nephropathy, and a preclinical discovery series
- Size
- Geography
- United States. A Delaware corporation listed on the Nasdaq Global Market, so a dissolution alternative runs under Delaware's court-supervised claims procedure and a reverse merger delivers a US listing to a private counterparty
- Ownership
- Situation
The Prompt
You are advising the Board of Directors of Uplandcare Biosciences, Inc.
Supporting Materials
What you are handed at the start of the case, in the format a real process would use.
What You Have to Produce
The deliverables, in the order the committee will read them. The exercise runs 90 minutes.
Part 1
Part 2
Part 3
Part 4
Part 5
Part 6
Part 7
Part 8
How to Approach It
The order a strong candidate works in, and why. This is the shape of the answer — the finished answer deck and memo are in the solution set below.
- 01
Decide the unit before you open anything
- 02
Build the bridge line by line rather than quoting a number
- 03
Run the funnel by what the counterparty wanted, and keep the drop-outs
- 04
Screen the precedent set, and show both statistics
- 05
Compare the alternatives on one axis at one rate
- 06
Show the reverse merger twice, or you have not compared it
- 07
Argue the contingent right with a count, not a discount factor
- 08
Say what waiting costs, and say the uncomfortable sentence
Key Concepts
The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.
Percentage of net cash at close as the pricing unit
When a company has no revenue, no earnings and no enterprise value, there is nothing for a multiple to attach to, and every valuation technique that begins with an operating metric is unavailable — not difficult, unavailable. What replaces it is the balance sheet, and the market convention is to express consideration as a percentage of net cash at close. The denominator is not cash today but cash on the day the transaction closes, after the burn incurred getting there, the restructuring already committed, the wind-down of a terminated program, the transaction costs, the payables and any lease settlement. Two deals at the same headline price are not the same deal if their bridges differ, which is why the bridge is printed line by line rather than quoted.
Reverse merger, and the difference between signing and realizing
A private company with a program and no listing merges into a public shell with cash and no program. The shell's shareholders keep a percentage of the combined company, and that percentage is not negotiated directly — it falls out of an agreed value for the shell, an agreed pre-money for the private company and the size of a concurrent private placement. The signing terms are the easy part and they are usually good. What decides the alternative is what the retained stake is worth after the lock-up runs off, in a security that did not trade when the deal was struck. A precedent page that reports only the value the deal implied is reporting the negotiation rather than the outcome.
The contingent value right, and what a holder can actually bank
A contingent value right pays holders a share of defined proceeds if a defined event occurs. It is the standard answer to an asset a balance sheet cannot price, and the standard version of it is much weaker than it looks: non-transferable, so it cannot be sold, marked or hedged; struck on an asset the holder does not control; with no obligation on the controlling party to develop, out-license or dispose of it; and no reporting on whether they have. The right questions are structural rather than arithmetic. Is there a disposition obligation or a reversion? Is it transferable? Is there reporting? Absent those, the instrument is an option written by the holder and exercised by someone else, and the honest evidence on what it is worth is a count of what comparable rights actually paid.
Dissolution as the floor, not as a choice
A Delaware dissolution is the one alternative that requires nobody's agreement, which makes it the floor every proposal is measured against. It is also the alternative whose headline figure is the most misleading. Under the court-supervised procedure the company must reserve against pending and unknown claims before distributing anything, and that reserve is held for the statutory period — so a large part of what shareholders eventually receive arrives years after the first distribution, and is worth less for that reason alone. A company that has just lost a Phase 3 trial with a listed security has a securities claim to reserve against. The arithmetic that matters in a dissolution is the timing, not the total.
One discount rate across mutually exclusive alternatives
Three alternatives that pay at three different times cannot be compared on undiscounted totals, and they cannot be compared at three different rates either. Using a different rate for each — a low one for cash, a higher one for stock, a higher one still for a liquidating trust — makes the ranking a function of the rates rather than of the alternatives, and no reader can tell which is doing the work. One rate across all three preserves the comparison, and the discipline that goes with it is to re-run the ranking at a materially higher and lower rate and show it does not move. A recommendation that changes with the discount rate is a statement about the discount rate.
The process funnel as evidence
A funnel is the record that a price is the market's answer rather than the first answer, and it is only evidence if the counts are right. Screened, contacted, under confidentiality agreement, into the data room, indications received, invited to the second round, revised proposals delivered — split by what each counterparty actually wanted, because a cash buyer, a listing seeker and a contract buyer are three different markets and pooling them describes none of them. The parties that reached the second round and withdrew belong on the page with their reasons: two withdrawals usually say something about market depth rather than about the company, and the third often prices a term nobody had tested.
Screening a precedent set, in both directions
A precedent set is only as good as its exclusions, and exclusions have to be published with reasons or they look exactly like selection. In a balance-sheet transaction the disqualifiers are specific: the target carried an approved revenue-generating product, so the consideration bought a business rather than a balance sheet; the target retained a royalty portfolio, so the percentage is not a claim on cash alone; the acquirer assumed an unquantified liability the percentage does not capture; the reported statistic was struck on net cash at announcement rather than at close. Note that those cut in both directions — some raise the statistic, some lower it — which is exactly why the answer cannot be inferred from the shape of the list, and why the median and the mean should be printed before and after.
Runway when there is no catalyst
Runway is normally the clock in a biopharma case: months of cash against the next data readout, and the question is whether the company reaches it. Here there is no readout, no pending regulatory action and no financing to raise, and that changes what runway means rather than making it irrelevant. A long runway is not optionality if there is nothing to wait for; it is simply a longer period over which the only asset is consumed. The way to make that concrete for a board is arithmetic rather than rhetoric — put the gap between the two live proposals against the monthly burn and state how many months of deliberation are worth the difference between them.
What Makes It Hard
The specific traps in this case — the places candidates lose the assessment without noticing.
Check Your Answer
Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.
How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.
What the Case Asked For
The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.
The Model Answer
The worked answer in full: answer deck and memo, built the way a banker would actually build them. It is a reference, not a submission — a strong answer under the clock is far shorter.
What the Solution Covers
- —Process funnel from screening to revised proposals
- —Reverse merger versus sale versus wind-down
- —Contingent value right on legacy assets
- —Offer evolution grids
- —Cash runway and burn management
- —Board alternatives framing
Answer Deck
Full model answer, banker-formatted
Memo
The written recommendation and how it was reached
Upgrade to Diamond
Sign up and upgrade to Diamond to unlock the answer deck, the memo and the audio walkthrough.
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PowerPoint Deck and Memo (PDF) and Answer Deck (PDF) — yours to open, edit and rebuild
Walkthrough
A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.
Audio Walkthrough
How to approach Project Uplandcare — Biopharma Strategic Alternatives
60-second preview — upgrade to Diamond for the full walkthrough
Frequently Asked Questions
Why is there no valuation section in a strategic alternatives case?
Because there is nothing to value with. The company has no revenue, no earnings and no enterprise value, so there is no operating metric a multiple could be struck on and no comparable companies analysis to run. A discounted cash flow is not available either — the only forecastable cash flow is the burn, and discounting a burn produces a negative number rather than a value. What replaces the valuation kit is the balance sheet, and the convention is to express every figure as a percentage of net cash at close. The absence of a valuation is a finding that belongs in the front matter, not an omission to be worked around, because a reader who is not told will assume one was performed.
What is net cash at close, and why is it not just the cash balance?
It is the cash the company will actually have on the day a transaction closes, and it is materially different from cash today. Between the balance sheet date and closing the company keeps burning, pays severance and retention it has already committed to, closes out clinical sites and cancels contract research, incurs advisory, legal and tail insurance costs, settles payables and accrued liabilities, and settles or assigns its lease — offset by whatever it realizes from equipment and subleases. Every one of those lines has to be on the page, because the consideration is expressed as a percentage of the result and a board being asked to accept a percentage has to be able to rebuild the denominator underneath it.
How do you compare a cash sale, a reverse merger and a dissolution?
By putting all three in the same unit and at the same point in time. The unit is percentage of net cash at close, which is what both counterparties bid in. The timing is handled by discounting each alternative at the point it actually pays — the cash sale at closing, a contingent right on its trigger date, a retained stake when the lock-up runs off, a dissolution across an initial distribution and a reserve released after the statutory period. Use one discount rate for all three, because three rates would make the ranking a function of the rates. Then re-run the ranking at a materially higher and lower rate: if the order changes, the recommendation is a statement about the rate rather than about the alternatives.
How much should a contingent value right count toward the decision?
Usually much less than the arithmetic suggests, and the reasons are structural rather than probabilistic. The standard instrument is non-transferable, so a holder cannot sell, mark or hedge it; it is struck on an asset the holder does not control; there is no obligation on the controlling party to develop, out-license or dispose of that asset; and there is no reporting on whether they have. That combination is an option written by the holder and exercised by someone else. The defensible treatment is to make the recommendation on the upfront consideration alone, say explicitly that the right is being treated as worth nothing for the purpose of choosing between alternatives, and say equally explicitly that this is not a view that the asset is worthless — then set out the specific changes that would make it count, and what each is worth.
Why does a reverse merger that beats the cash bid at signing still lose?
Because the two numbers are not denominated in the same thing. The cash proposal pays cash at closing. The reverse merger pays a percentage of a company that does not yet trade, released after a lock-up that typically runs six months, and the value of that stake is decided by where the combined company trades when a holder can finally sell rather than by what the merger agreement said it was worth. The way to test it without arguing about a future share price is to invert the question: solve for the level the retained stake would have to reach for the alternative to win, and put that level against what comparable retained stakes actually reached ninety days after closing. If almost none of the precedents cleared it, the alternative is not close, and no negotiation at signing changes that.
How should the 90 minutes be spent?
Roughly: fifteen minutes on the bridge to net cash at close and the per-share arithmetic, because that denominator frames everything and candidates consistently underspend it. Fifteen on the process funnel and the offer-evolution grid, which are largely transcription and where the withdrawals repay reading carefully. Twenty on the two precedent sets, most of it on screening rather than on the medians. Twenty on the three alternatives, the single-rate comparison and the reverse-merger breakeven. Ten on the contingent right and the changes to ask for. That leaves ten for the recommendation and the scope denials — and the denials should be drafted first, not last, because they belong at the front of the document and they discipline everything in between.
About This Healthcare / Biopharma Strategic Alternatives Case Study
Healthcare / Biopharma Strategic Alternatives case study for investment banking interviews. 90-minute format covering process funnel from screening to revised proposals, reverse merger versus sale versus wind-down, contingent value right on legacy assets. Includes the full prompt, a model answer deck, a written memo and an audio walkthrough.
This case study sits in Investment Banking, under Healthcare & Life Sciences. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.
90-Minute Format
The time limit a real assessment would give you
Answer Deck
Included in the model answer
Memo
Included in the model answer
Audio Walkthrough
How to approach the case under time pressure
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