Valuation is often said to be “an art, not a science” in recognition of the uncertainties involved. The valuation of biomedical companies, though science-based businesses, is no less susceptible to uncertainty. Indeed, the biomedical industry is riskier than many other industries due to the particular regulatory and economic factors involved. Ignoring these factors may result in the doctor calling a “code blue” on your valuation. Join technology and valuation expert John Elmore in a discussion of cogent approaches and methods for valuing biomedical company assets and business interests for financial reporting, taxation, litigation, and other purposes. This session will summarize the economic and regulatory environment of the biomedical industry and address how valuation analysts can model the complexities and uncertainties inherent to the industry.

Measuring Uncertainty

• Identifying uncertainty in biomedical industry valuation
• Understanding how (and how not) to quantify uncertainty

Overview of the Biomedical Industry

• Types of biomedical companies
• Biotechnology
• Pharmaceuticals
• Medical devices
• Medical and diagnostic service providers
• Regulatory environment
• Drug development and approval
• Medical device development and approval
• False Claims Act
• Taxation issues
• Economic environment
• Life cycle
• Primary metrics
• Demand drivers and pricing issues
• Who pays—reimbursement system overview
• Status and outlook of the US biomedical industry

Biomedical Valuation Approaches

• Generally accepted valuation approaches
• Asset approach
• Market approach
• Income approach
• Discounted cash flow method
• Determination of an appropriate discount rate
• Product pipeline valuation issues
• Advanced
• Intellectual property valuation issues
• Decision tree model
• Real option models
• Monte Carlo simulations

Valuation Example

Biomedical Industry Resources

• Become familiar with the economic and regulatory environment of the biomedical industry
• Become familiar with the current status of the US biomedical industry – where in the cycle we are and what is in store for the future
• Gain a better understanding of relevant valuation factors for the biomedical industry
• Learn specific industry metrics and how these metrics are relevant to making a reliable projection