Platform vs. Product
Different Assets Require Different Diligence
Article 4 of 10 in a series on cell therapy partnership strategy.
In December 2023, AstraZeneca paid $1.2 billion for Gracell Biotechnologies. The company had no approved products. Its lead candidate was in Phase 2. By traditional biotech valuation metrics, the price seemed aggressive.
But AstraZeneca wasn't buying a product. They were buying FasT CAR-T—a manufacturing platform that reduces production time from weeks to hours. The acquisition thesis centered on platform value: the ability to apply rapid manufacturing across multiple CAR-T candidates, potentially transforming AstraZeneca's entire cell therapy portfolio.
The distinction between platform and product acquisitions is fundamental to cell therapy deal-making. Experienced acquirers approach these transactions differently, structure diligence around different questions, and price the opportunities using different frameworks.
What Makes a Platform
Not every company with multiple candidates has a platform. A platform exists when underlying technology or capability extends meaningfully beyond current applications—when what you're acquiring can generate value across products you haven't yet identified.
True cell therapy platforms typically exhibit several characteristics:
Manufacturing technology that transfers across targets. FasT CAR-T's rapid production works whether the CAR targets CD19, BCMA, or other antigens. The platform value comes from manufacturing methodology, not target selection.
Vector or delivery systems with broad applicability. Companies that have optimized lentiviral transduction, developed proprietary vectors, or created novel delivery approaches bring capability that extends to future candidates.
Engineering innovations that enhance multiple constructs. Armored CARs with cytokine support, safety switches that work across designs, or signaling domain innovations that improve persistence—these represent platform value when they can be combined with different targeting domains.
Quality and regulatory infrastructure that scales. Companies that have built GMP manufacturing, established quality systems, and navigated regulatory requirements for one product have infrastructure that accelerates subsequent products.
Platform Diligence: Different Questions
When evaluating a platform acquisition, experienced acquirers focus on extensibility rather than current assets.
Technology transferability evidence. Has the platform actually been applied across multiple targets or indications? Theoretical extensibility means less than demonstrated application.
Intellectual property architecture. Platform value requires IP that protects the platform, not just specific products. Patents on manufacturing methods, vector designs, or engineering innovations matter more than patents on specific CAR sequences.
Team capability and continuity. Platforms often depend on tacit knowledge held by development teams. Diligence must assess whether platform capability survives personnel changes.
Integration requirements. Platform value often depends on integration with acquirer capabilities. A manufacturing platform is more valuable to an acquirer with clinical-stage assets that can benefit immediately.
"Platform diligence asks: can this technology transform our existing portfolio? Product diligence asks: does this asset fit our therapeutic strategy?"
Product Diligence: Traditional but Deeper
Product acquisitions follow more familiar biotech diligence patterns, but cell therapy specifics require deeper technical evaluation.
Manufacturing reality. Clinical data from a product means little if manufacturing can't scale. Diligence must verify manufacturing success rates, vein-to-vein time distributions, and batch failure rates.
Durability of response. Cell therapy differs from other modalities in that durable responses are possible—and increasingly expected. Diligence must evaluate persistence data, not just initial response rates.
Competitive positioning. The CAR-T landscape is maturing rapidly. Diligence must assess where the product sits versus current and emerging competition.
COGS trajectory. Payer access increasingly depends on cost-effectiveness arguments. Products with clear paths to manufacturing cost reduction have different long-term economics.
Valuation Frameworks
Platform and product acquisitions demand different valuation approaches.
Product valuation follows risk-adjusted NPV models familiar from traditional pharma. Probability of success, estimated peak sales, competitive dynamics, and cost structure combine to produce expected value.
Platform valuation requires real options frameworks. The platform's value includes not just current applications but the option to apply it to future programs. AstraZeneca's Gracell valuation implicitly included the option value of applying FasT CAR-T across their cell therapy ambitions.
Implications for Sellers
If you're building a cell therapy company with exit or partnership in mind:
Document platform extensibility. Demonstrate it: apply your manufacturing process to multiple targets, show your vector system works across constructs.
Build IP strategically. Patents on platform elements support platform valuations. Patents only on specific CARs support product valuations.
Match partners to value recognition. Some acquirers can capture platform value immediately. Others may only recognize product value. The right partner depends on what you're selling.
Next in series: Speed-to-Patient as Competitive Advantage
Previous: Three Manufacturing Strategies That Work
For advisory on cell therapy partnership strategy, contact Kerlann Advisory.