Need:
An emerging pharma client needed to obtain a valuation of its highly important drug candidates in key Asian markets before negotiating a major deal with a top-tier Chinese pharma company.
Assignment:
MSC was hired to determine the risk-adjusted net present value for each of the client’s 4 preclinical and clinical assets. The valuation was performed using MSC’s proprietary valuation software and established methodology for valuation of drug development programs. Firstly, MSC estimated the incidence for each of the indications in the client’s 6 target product profiles. The incidence was calculated for each Asian country, accounting for each region’s ongoing vaccination programs and level of advancement of the healthcare systems. Secondly, MSC estimated the probability for each of the assets to reach the market based on a large-scale study of historical data of market approvals within the same disease groups. Thirdly, MSC forecasted R&D investments as well as future costs of goods and sales to determine profit margins together with the client. Based on the above, MSC determined today’s aggregated net present value of the total portfolio assuming different timing of market approvals in different regions. The valuation served as foundation for the CEO and company Chair to negotiate a deal with one of the five biggest pharma companies in China.
