Valuations in pharma and biotech are driven by assumptions that vary widely based on the unique risk profile of the company or product. CELforPharma faculty member Dr. Patrik Frei, from Pharma-Biotech Product & Company Valuation, has made a handy checklist that helps you identify critical factors and provides a framework for assessing aspects that could influence the valuation.
Download the full checklist below ↓
The checklist focuses on three essential areas that determine the value of a life sciences company or product:
1. 👔 Management
A company's leadership plays a pivotal role in its success. Assessing the quality of management involves evaluating:
Skills Completeness: Are the right competencies in place for effective decision-making?
Track Record: Does the management team have a history of delivering results?
Motivation and Incentives: Are incentives aligned with long-term value creation?
Emotional Intelligence and Social Competence: Can leaders inspire confidence among stakeholders?
2. 🗺️ Market Environment
Understanding the market environment is crucial for identifying growth opportunities and anticipating challenges. The checklist includes:
Market Potential: What is the current and future demand for the product or service?
Competitive Landscape: Who are the key competitors, and what strategies are they employing?
Regulatory Dependencies: Are there political or legal factors that could impact valuation?
Industry Structure: How do competitors, supplier and customer dependencies shape the company’s position?
3. 🔬 Science & Technology
In a sector driven by innovation, the strength of a company’s science and technology underpins its value. Key factors include:
Intellectual Property (IP): Is the IP portfolio robust and defensible?
Unique Selling Proposition: What differentiates the product in the market?
Alliances and Partnerships: Are collaborations helping accelerate development?
Time to Market: Can the company bring products to market efficiently?
🎓 If you want to learn about:
- A methodology for assessing and optimising the risk profile of a life science company prior to valuation.
- The different valuation methods used for life science companies and products.
- How to calculate the value of a biotech or life science company with the Discounted Cash Flow method/rNPV, comparables and Venture Capital method.
- How to use risk-adjusted Net Present Value (rNPV) to calculate the value of a pharmaceutical compound in development.
- How to structure the licensing deal between companies, covering issues such as milestone and royalty payments.
👉 Attend Dr. Patrik Frei’s highly praised 1-day course:
Pharma-Biotech Product & Company Valuation
With Dr. Patrik Frei
