Paper
Journal of Commercial Biotechnology (2006) 12, 175–181; doi:10.1057/palgrave.jcb.3040164
Pitfalls of valuation in biotech
Ralph Villiger1 and Boris Bogdan2
- 1Avance, Basel GmbH, Pfluggässlein 14, 4001, Basel, Switzerland
- 2Partner at Avance, Basel GmbH
Received 5 August 2005.
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Abstract
Biotech companies face the need for valuation at various stages: fund raising, licence contracts, initial public offerings and mergers and acquisitions. The authors explain why common discounted cash flow methods are not suitable for drug development projects, sketch how real options valuation works, and address the most important misunderstandings.
Keywords:
valuation, DCF, real options, Black-Scholes
