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Medium Merger & Acquisition

ICEAP

#Healthcare

Practice this intermediate merger & acquisition case interview question in the Healthcare sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.

ProHub Comment

This case requires candidates to build a market sizing model for a medical device therapy, then strategically brainstorm ways to improve investment returns given competitive pressures from insurance payers. The case tests both quantitative analysis (calculating market opportunity) and strategic thinking (identifying value drivers and risks in healthcare innovation).

Estimated Time 26 minutes
Difficulty Medium
Source Duke
19 / 100
Your client, Device 3 Ventures is a US based venture fund that invests in attractive early medical devices technologies in hopes to quickly gain a positive ROI. Device 3 is evaluating whether to invest in a joint venture with the Mustard Clinic to fund a new therapy for acute pancreatitis (“AP”) called ICEAP. Device 3 wants to know if they should invest in this technology?

Clarifying Information

  1. Device 3 focuses on funding technologies that gain positive ROI within 3 years. Device 3’s strategy is to develop the technology to the point where a strategic buyer (i.e. Medtronic) would want to buy the technology from them.
  2. Acute Pancreatitis is a disease that can be deadly and can cause ER stays of up to months.
  3. ICEAP provides therapeutic relief by cooling the pancreas. It has been extremely successful at curing rodent AP, reducing mortality rates in AP from 90% to <10%. The technology is patented by Mustard Clinic.
  4. This therapy is a medical device, and the patient still needs to take additional drugs, etc to fully recover from AP.
  5. Medical Device manufacturers revenues’ rely on insurance reimbursements. The industry is highly competitive and innovation is a clear competitive advantage.
  6. Interviewees should keep in mind regulations in healthcare
Mock Interview
Interviewer

Your client, Device 3 Ventures is a US based venture fund that invests in attractive early medical devices technologies in hopes to quickly gain a positive ROI. Device 3 is evaluating whether to invest in a joint venture with the Mustard Clinic to fund a new therapy for acute pancreatitis ("AP") called ICEAP. Device 3 wants to know if they should invest in this technology?

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
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Practice this case with AI Mock Interview

Device 3 Ventures must decide whether to invest $30M in ICEAP, a promising early-stage medical device for acute pancreatitis treatment. The case involves market sizing the AP treatment market, identifying the device market capture potential, and brainstorming strategies to maximize revenue and minimize costs to justify the investment.

Key Insights:

  1. Market sizing requires breaking down population incidence rates by age group and calculating total addressable market, then applying competitive device capture rates (~10% of treatment market, 1% initial capture for new devices)
  2. Revenue opportunity ($5.8M Y1, $8.8M Y2, $13.2M Y3 = ~$28M total) must be compared directly against investment cost ($30M) to determine ROI viability
  3. Physician and hospital adoption insights from Exhibit #2 show strong demand signals and unfulfilled customer needs, which could support accelerated adoption rates beyond historical benchmarks
  4. Key risks include human viability uncertainty, regulatory timeline misalignment, reimbursement rates, and competitive copying - requiring specific mitigation strategies in R&D, regulatory affairs, and market strategy
  5. Strong candidates structure brainstorming into Revenue/Costs/Product buckets and provide specific actionable recommendations with clear point-of-view rather than generic lists

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