Global specialist provider of business development services to the pharmaceutical and healthcare sectors


Financial Modelling | Valuation

A two-day intensive course which provides a hands-on guide to understanding, developing and employing financial models as a framework for valuing and negotiating pharmaceutical business development deals.

The financial concepts and calculations are presented as part of a real life case study of a co-development and licensing deal between a biotech and a pharmaceutical company. The delegates are expected to have a basic understanding of Excel and will be shown how to develop a valuation model and how to use it in negotiations.

Introduction to the Case Study

  • Biotech and pharmaceutical company profiles, strategy and financial objectives

Company valuations

  • Review of company P&L, balance sheet and cash flow, biotech funding, burn rate and revenue recognition
  • Investor expectations, news flow and analysts’ reports

Forecast profit and loss and cash flow

  • Structure and content of the Excel model to value and set deal terms for the product opportunity
  • Sales forecasting: epidemiology and market data, product life cycle and pricing
  • Operating costs: cost of goods, R&D and Sales and Marketing

Valuation Methods

  • Accounting methods
  • Discount rates, discounted cash flow, NPV and IRR
  • Risk adjusted valuation methods including decision trees

Deal terms

  • Equity, milestones, development costs, supply profits and royalties
  • Benchmarking
  • Share of NPV and other profit sharing methods
  • Risk management in the legal agreement

Other business development deals

  • Product acquisition valuation
  • Co-promotion valuation and issues
  • Biotech company valuation