Valuation in Life Sciences: A Practical Guide

by Boris Bogdan, Ralph Villiger

Valuation is a hot topic among life sciences professionals. There is no clear understanding on how to use the different valuation approaches and how to determine input parameters. Some do not value at all, arguing that it is not possible to get realistic and objective numbers out of it. Some claim it to be an art. In the following chapters we will provide the user with a concise val- tion manual, providing transparency and practical insight for all dealing with valuation in life sciences: project and portfolio managers, licensing executives, business developers, technology transfer managers, entrep- neurs, investors, and analysts. The purpose of the book is to explain how to apply discounted cash flow and real options valuation to life sciences p- jects, i.e. to license contracts, patents, and firms. We explain the fun- mentals and the pitfalls with case studies so that the reader is capable of performing the valuations on his own and repeat the theory in the exercises and case studies. The book is structured in five parts: In the first part, the introduction, we discuss the role of the players in the life sciences industry and their p- ticular interests. We describe why valuation is important to them, where they need it, and the current problems to it. The second part deals with the input parameters required for valuation in life sciences, i.e. success rates, costs, peak sales, and timelines.

Genres: Finance

384 pages, Paperback

First published January 1, 2007

Reviews

[Serhii Kushchenko · Rating 4 out of 5]

The book is OK, but its authors could've done better. They could have presented the life sciences valuation methods in more understandable language.

If cash flow discounting is a new concept to you, consider postponing this read for a later time. Instead, delve into "Expectations Investing" by Mauboussin as a starting point.

This book may help create a biotech company valuation model to present to others. Its real options example is solid. It can serve as a good template.

Yet, when you wager your nest egg, you need a more robust approach. Relying solely on the methodologies outlined here for investment decisions is not a good idea. Predicting which drug candidates regulators will approve demands extensive expertise. You can't gain that expertise by reading just one small book.

[Nathan Lin · Rating 4 out of 5]

Worth Reading as an introduction book, especially the DCF part. But not very interested in the option evaluation. Moreover, contents are very basic.