Addressing the appropriate market is often one of the key success factors in due diligence, new product planning, opportunity assessment and business plans. Prima facie, everybody likes large market size and significant unmet needs. However, it is vital to focus on the market or segment where the asset will compete in, at least in the first instance.
Case-in-point: Significant excitement about a first-in-class biologic for asthma treatment. While there is high unmet need and asthma market size is large, the first-in-class biologic therapy is unlikely to be the first-line treatment for asthma, primarily for two reasons- a) the medical treatment algorithm might call for much simpler intervention as the first-line of treatment b) price watch dogs may stipulate cost-effective options as the first-line treatment.
Similarly, a novel cancer therapy while it may be groundbreaking but may not become the first line treatment. E.g. the market size for prostate cancer might be huge but a 3rd line treatment entry, would make the market size much smaller, despite significant unmet needs. A good practice is to identify the right market segment, estimate the market size and then address the competitive landscapes in that market/segment.