Friday, May 16, 2008

Valuation in Life Sciences: A Practical Guide

Some people read the Old Testament, others may read the New Testament, the Koran, the Bhagavad Gita, or the Guru Granth Sahib, my bible has become…Valuation in Life Sciences: A Practical Guide by Dr. Boris Bogdan and Ralph Villiger. This work has emerged as my one unambiguous go-to text when it comes to evaluation and valuation needs.

Just when I thought the risk adjusted net present value (rNPV) was the model for biotech and pharma valuation work Dr.’s Bogdan and Villiger have opened my eyes (and spreadsheets) to the world of real option valuation (ROV). What is key and fundamental to ROV theory is the development of a project (or company or patent or license or M&A transaction or stock, etc.) is dependent upon the changing market conditions of the real world and the sensitivity to incorporate this dynamic nature into the modeling versus discounted cash flow approaches where the modeling is static and predefined and thus unaccommodating to the dynamic market fluctuations of the real world.

Anyone who has ever sat down to model out a valuation of biotech or pharma assets that are yet to reach market, either pre-NDA, in the clinic or even pre-IND well there are a basket of hurdles (to say the least) associated with achieving a meaningful analysis. Leveraging the tools provided in Valuation in Life Sciences provides a road map on just how to achieve meaningful and flexible analyses. If you are in start-up mode, tech transfer, business development, finance or even still in business school do yourself a favor and pick-up a copy, you will not be disappointed!


The authors are holding a one-day workshop (6 June in San Francisco, at the Fairmont Hotel and 16 June in San Diego, at the Sheraton Hotel and Marina). Sounds like it will be an incredible day focused on:

  • Structure valuation models in Excel
  • Source input parameters (success rates, durations, costs)
  • Structure license contracts to bridge differing assumptions between licensor and licensee
  • Analyze and interpret license contracts for licensor and licensee in terms of: rNPV, IRR/ROI and Value share
For more information and registration information click (HERE) or follow this link:

I hope to attend the San Diego workshop, if you are planning to attend too shoot me an email ( and let’s connect.

*NOTE* Feel the power of the Colorado BioScience Association (HERE)!
*NOTE* Take a look at the new Boulder Biotech Company Tree (HERE)!
*NOTE* Read the new eBook CLSDF 2007 - What's In A Year? (HERE)!

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