Business case
In the expanding Chinese molecular diagnostics market, our client, a leading medical equipment company, found itself in a dispute involving joint venture, licensing and manufacturing agreements, triggered by the acquisition of the respondent by a US diagnostics company. Our client was considering launching arbitration proceedings.
Since the joint venture had not yet started commercial operations, our model assumptions were primarily based on the contemporaneous business plans. We dedicated a significant amount of effort to validating the reliability of the business plans and applying assumptions to the model. Additionally, given the cutting-edge nature of the molecular diagnostics technology involved (PCR), we conducted extensive research, competitor benchmarking and interviews with our client’s R&D staff to make our initial calculation and analysis more robust.
We were engaged as the quantum expert to review the sunk costs and provide an assessment of the lost profit claim to be pursued in the arbitration. Our initial assessment of the lost profit at c. USD 60m was based on contemporaneous business plans with certain adjustments. This preliminary assessment facilitated focused discussions between the parties, ultimately resulting in a settlement after the commencement of the arbitration proceedings.