Biotechnology
- review of business model
- assessment of intrinsic company value
- development of value-enhancing business strategies
- appraisal of comparables
- identification and contacting of potential investors
- preparation of documents to support fund raising
- organization of road shows
Investors
- review of business plan
- assessment of company value by risk-adjusting and discounting future cash flows
- analysis of comparables
- due diligence
Biotechnology
Bioscience Valuation generally starts with a review of the business plan and the business model. The business model provides the basis for the valuation. As described in  project valuation and value-driven project management, a company’s individual projects are analyzed and the projects’ future cash flows are forecasted. Uncertainties are modeled either using minimum – most likely – maximum estimates or taking advantage of discrete and continuous probability distributions and Monte Carlo simulations.
Value assessments that are based on forecasted cash flows provide what is commonly referred to as ‘intrinsic’ value. This contrasts valuations based on comparables, which are usually derived from publicly traded biotech or pharma companies. Although comparables are a good approximation of potential market value, they ignore market irrationalities that may result in a substantial over or undervaluation of firms. Furthermore, it is often difficult to identify similar companies, especially in an environment that is highly dependent on innovation and intellectual property. Bioscience Valuation recommends to investigate both, intrinsic as well as comparable value.
An advantage of the intrinsic value-approach is the possibility to contrast alternative business strategies. A client may have doubts whether early out-licensing may be the optimal strategy, or whether he should wait until crucial future milestones have been reached. The answer depends on many factors such as available resources, cost of development, probability of reaching future milestones and current licensing trends. Furthermore, a management team may be uncertain whether it should invest in the inflammation or rather in the oncology therapeutic area. Financial modeling can support strategic decision making in order to maximize value.
Following a thorough valuation, potential investors have to be identified. Through its comprehensive network with major venture capital, private equity, and pharma investors in Europe and in the USA, Bioscience Valuation is in the position to identify and contact promising partners. We assist clients in preparing a convincing business plan and presentation. Furthermore, we organize and support road shows as a platform for our clients to present their business case.
Investors
For investors and VC firms, a thorough valuation of companies in which they consider to invest – be it as seed investors or in the context of a consecutive financing round – is of paramount importance. We analyze a company's assets in terms of their ability to generate future cash inflows. The assessment of future markets is part of our service, as is the detailed analysis of competitors' products and pipelines. Equally important is the analysis of a company's scientific achievements and the risk-level of a company's R&D pipeline. Our services provide guidance for important financing decisions and help investors to identify critical issues that require special attention.
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