Bogdan / Villiger Valuation in Life Sciences

A Practical Guide
3rd Auflage 2010
ISBN: 978-3-642-10820-4
Verlag: Springer
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 377 Seiten, eBook

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.

Zielgruppe

Professional/practitioner

Autoren/Hrsg.

Bogdan, Boris

Villiger, Ralph

Inhaltsverzeichnis

Introduction.- The Life Sciences Industry.- Valuation.- Project Valuation.- License Contract Valuation.- Technology Valuation.- IP Valuation.- Firm Valuation.- Advanced Topics.- Valuation and Gut Feeling.- Excercises.

Leseproben

"Valuation in Life Sciences (p. 67-68)

In the following part we discuss how the theory outlined in the previous chapter is applied to valuation in life science. First we look at the input parameters related to life science valuation and then at some special aspects, i.e. discounting, volatility and peak sales prediction, before moving on to the actual valuation. We start with the valuation of standard projects and then gradually move to the more complex problems. Every section includes a case study to illustrate practically how to use the theory. The exercises in the last part of the book complement the cases.

Fundamentals

In the following chapter the reader learns more about the data required for valuation in life sciences companies. We first discuss drug development and then medical device development. The chapter shall serve as a reference for those readers not familiar with life science. For reasons of clarity, we have not included all publicly available data, but have generated a combination the user can apply to valuation.

Drug Development

Drug Discovery
Drug discovery following basic research can in most cases be broken down into four phases: Target identification, target validation, lead identification, and lead optimisation. In the following we briefly describe each phase for those readers not familiar with the topic.

Target identification: Biological research studies the basic cellular processes in the healthy and pathologic state. By comparing these states, disease responsible actors are identified as possible drug targets.

These targets are mainly proteins, such as cell surface receptors. Once a target has been selected, its interacting partners, biologic, and biochemical function is examined. A disease model is then set up and studied. Cultured human cells or animals such as mice serve as model.

Target validation: In search for the suitable target, each target for a given disease is compared to others and its potential in regulating biologic processes is assessed. The most promising targets are selected for further drug development.

Hit identification: In the next step, compounds acting on the selected target and leading to the looked-for change are discovered and characterized. Usually large libraries consisting of thousands to millions of molecules are used. Compounds interacting with the target, leading to the looked-for change, are selected, if present in the library. The identified compounds are called leads.

Lead optimisation: Lead optimisation is the stage during which medicinal chemists attempt to improve primary leads to achieve the best compromise between improved activity, bioavailability and safety. Often during this same stage of development, lead prioritisation studies are conducted in living organisms (in vivo) and in cells in the test tube (in vitro) to compare various lead compounds and how they are metabolised and affect the body. Once the optimised lead is chosen, it is taken to the last stage prior to human testing, the preclinical studies."