Speciality Pharma Opportunity Assessment
Speciality pharma remains one of the more attractive areas within health & life sciences, combining structural growth with multiple execution-led levers for value creation. This makes it attractive to private equity in a sector with clear exit opportunities, which is why commercial diligence and early risk mitigation are critical to maximising value.
Speciality pharma has the right growth opportunities and size characteristics for PE
Speciality pharma assets often sit at an attractive scale for private equity because they can be refocused through sharper portfolio strategy, leaner SG&A and better capital allocation, then grown and sold on to larger biopharma or PE-backed platforms. They can also be used to build broader portfolios that diversify risk, improve cash flow and increase operating leverage, while benefiting from demand among smaller biotechs for commercial partners with regional scale. Geographic expansion can add top-line growth, and at this stage, value creation is often driven more by execution than clinical risk, which PE is well placed to underwrite. As later-stage assets, they may also offer diversification across managers, sectors and geographies, with a more limited J-curve and faster distributions.
Figure 1: Private equity already comprises over 40% of the speciality pharma companies Mansfield Advisors is tracking
Speciality medicines have taken a steadily larger share of pharma spending in developed markets, rising from 29% in 2013 to 50% in 2023 (Figure 2). This reflects a mix of demand- and supply-side factors: ageing populations and higher chronic disease burden are increasing demand for more targeted therapies, while innovation in areas such as rare disease, oncology and immunology continues to expand the range of speciality products available.
The category is also growing faster in value than in volume, as spending shifts toward higher-cost speciality treatments while traditional primary care and generic medicines become more commoditised. This trend looks set to continue, supported by a strong pipeline and favourable approval dynamics, particularly in orphan drugs, which now account for a meaningful share of new product approvals and are expected to outgrow the wider market.
There are multiple exit opportunities in speciality pharma, but planning is key, as there could be PE-backed competition
Figure 2: Speciality medicine’s increasing share of spending in the top 10 developed countries
There are several credible exit routes for a speciality pharma asset, but each requires active planning and careful positioning. A buy-and-build strategy may be most attractive when the original value-creation plan is still incomplete, and there is time to continue scaling, particularly through geographic expansion. A trade sale remains a logical route, although higher debt costs mean buyers are likely to be selective, focusing on assets that fill specific portfolio or regional gaps. An IPO is possible for the right high-growth asset, especially given the relative scarcity of attractive pharma names in public markets, but market conditions remain challenging. Reverse mergers into public companies and continuation vehicles are also viable in some situations, particularly where flexibility, restructuring time or a broader investor base is needed, though these routes are typically more complex and can be seen as secondary options rather than the preferred path.
Benefits of vendor commercial due diligence during an exit from speciality pharma
Vendor commercial due diligence (VCDD) helps management articulate a clearer, more credible growth story by sharpening the business’s differentiated positioning, improving transparency on historical performance and making value easier for investors to underwrite. It also supports a more efficient sale process by anticipating bidder questions, reducing avoidable concerns and improving deal certainty. Beyond the transaction itself, Mansfield’s VCDD gives management and prospective buyers a fuller view of the business, highlighting growth opportunities, competitive dynamics, customer perspectives and the key strategic priorities most likely to drive future value.
We can help you understand and explain commercial risks that are external to the business
Commercial risks in speciality pharma increasingly sit outside management’s direct control, particularly around payer access, distribution complexity and pricing policy. Tighter reimbursement scrutiny can delay uptake and reduce realised value, while operational frictions in speciality distribution can slow prescriptions reaching patients and limit adoption. At the same time, policy reforms such as Medicare redesign, IRA pricing pressure and broader European cost-effectiveness scrutiny can compress long-term revenue and shorten product lifecycles. The implication is that companies need to mitigate earlier through stronger HTA planning, payer-relevant evidence generation, more integrated distribution models and pricing strategies aligned to evolving market access requirements.
