Background

A big pharma company sought to evaluate the strategic and economic rationale for transforming part of its internal manufacturing network into a CDMO platform. Facing pipeline reprioritization and underutilized production assets, the company needed to determine whether repurposing certain sites for third-party manufacturing or pursuing divestment would create greater long-term value. The objective was to define the most viable strategic path balancing growth potential, execution feasibility, and organizational focus.

Our approach

In sixteen weeks, Larka conducted a comprehensive strategic and operational assessment to guide the client’s decision on whether to transform or divest several manufacturing sites. The engagement combined market intelligence, proprietary bottom-up modeling, and capability benchmarking to define the most value-accretive and executable path forward. The work included: (i) Market Opportunity Assessment – sized CDMO market opportunities using Larka’s proprietary models, segmenting by technology, geography, and customer type; (ii) Asset Competitiveness and Right-to-Win Benchmarking – evaluated site capabilities and technological maturity against leading CDMOs, supported by 30+ expert and potential customer interviews validating perception of quality and differentiation; (iii) Operational Readiness Assessment – reviewed site compliance, support functions, and workforce capabilities to gauge transformation feasibility; (iv) Scenario-Based Strategic Modeling – analyzed conversion, partial exit, and full divestment options by growth potential and execution complexity; (v) Commercial Feasibility – profiled target customer segments and go-to-market requirements to test the commercial viability of operating as a CDMO; (vi) Partnership Pathways – explored joint ventures and alliances to maximize value and reduce execution risk.

Outcome

The engagement enabled the client to make a clear, data-backed decision on the strategic future of its manufacturing network. Based on Larka’s analysis, the client elected to progressively divest non-core sites to relevant acquirers, while selectively positioning a few facilities with the strongest right-to-win to offer CDMO services in the interim. This approach allowed the client to leverage near-term market opportunities, validate external demand, and strengthen site valuation ahead of divestment.