Valuation in Life Sciences A Practical Guide
This book is the first complete guide to valuation in life sciences for industry professionals, investors, and academics. Boris Bogdan and Ralph Villiger introduce the characteristics of drug and medical device development, explain how to translate these
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Boris Bogdan · Ralph Villiger
Valuation in Life Sciences A Practical Guide Third edition
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Dr. Boris Bogdan Avance, Basel GmbH B¨aumleingasse 2 4051 Basel Switzerland [email protected]
Ralph Villiger Avance, Basel GmbH B¨aumleingasse 2 4051 Basel Switzerland [email protected]
ISBN 978-3-642-10819-8 e-ISBN 978-3-642-10820-4 DOI 10.1007/978-3-642-10820-4 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2010924856 c Springer-Verlag Berlin Heidelberg 2007, 2008, 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
Foreword to the First Edition
Capital, whether it originates from venture, public equity, private, or government sources, continues to be biotech’s source of sustenance. In fact, access to financing can make or break a company, regardless of whether it has Nobel Prize winning science or a top-flight business school management team. In order to attract capital there has to be a “value proposition” that is sufficiently engaging and well constructed that will not only capture the imagination of investors but also make them want to ultimately invest. This book recognizes that there is no consent on how to apply valuation methodologies in life sciences. One of the complicating factors is that, compared to other industries, valuation of biotech innovation is much more demanding. The long 10-15-year development and clinical trials process still represents the main risks faced by any biotech company. Added to that is the fact that getting a drug across the regulatory goal line and receiving Food and Drug Administration approval (or other regulatory agency approval in the United States or elsewhere in the world) for marketing is no longer good enough. Since the biotechnology industry is not isolated from the major influences affecting the overall healthcare industry, the reality of de facto healthcare cost controls will mean a significant reduction in “peak sales” for individual drugs. Science will no longer be the deciding factor; payor agents will play a far more activist role via reimbursement criteria, co-payment arrangements and s
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