Biotechnology Valuation : An Introductory Guide

by Karl Keegan (CanaccordAdams, London)

• ISBN13: 9780470741344
• ISBN10: 0470741341
• Format: eBook
• Copyright: 2009-01-01
• Publisher: Wiley

Summary

* The first book to provide a simple and practical means of valuing biotech companies * The book begins with a short history of the biotechnology industry; this is important as although it is about 30 years old, the first company went public only in 1996, so it is possible to plot the course of investment waves and dips * It examines the European industry and its evolvement, and draws parallels between the similarities and differences between that and the US * Looks at the various companies which make up the biotech industry (therapeutic; life sciences; and the medical technology company) and gives tools for the investor to properly evaluate them

Table of Contents

ContentsAcknowledgements1 IntroductionBiotechnology Background2 Traditional Valuation MethodsThe Value of a CompanyAccounts - Providing the Data for Valuation AnalysisThe Income StatementBalance SheetCash Flow StatementIncome Statement MultiplesBalance Sheet MultiplesSummaryDiscounted Cash Flow AnalysisNet Present ValueConstructing the DCFProjecting the Cash Flow StreamChoosing a Discount RateOther Thoughts3 The Drug Development ProcessThe Drug Development ProcessDrug Discovery and ResearchPre-Clinical DevelopmentClinical TrialsWhat Investors Should Look For When Analysing Clinical TrialsConclusionThe Regulatory ProcessRegulation in the USRegulation in EuropeThe LabelTimelines for ApprovalPost ApprovalInvestment LessonsCase Study #14 Biotechnology Company ValuationData CollationNPV of the PipelineCalculationsSensitivity AnalysesDCF of Whole CompanyEBIT DCF of ProductsComparables ValuationNPVs are AdditiveUsing all the Tools Available to Reach a Valuation ConclusionMarket ModelsConclusionAppendix 1Example 1Example 2Example 3Appendix 2Biosimilar Update5 Decision Trees and Real OptionsDecision TreesDiscount RateDeriving ScenariosConclusionDecision Tree ExampleReal OptionsValuing OptionsEstimation of the Input VariablesConclusions6 Biotechnology InvestingTypes of Healthcare InvestmentBiotechnology Sector EvolutionBiotechnology Investment CyclesBiotechnology Business ModelsFocus on PeopleCashProduct PipelineCommercial RisksNewsflowLessons from Biotech Investing7 Early-stage ValuationPrivate ValuationDiscounted Cash Flow MethodComparable ValuationVenture Capital MethodDiscount RatesConclusionGlossaryReferencesIndex