Valuations in pharma and biotech are driven by assumptions that vary 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 using 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
