Make your reservation for this case study-focused session starring the Probability-Weighted Expected Return Method (PWERM). Using the backdrop of a clinical stage biotech company you’ll observe the differences and similarities between the PWERM and the option pricing method. Join leading expert Annika Reinemann who will lead a discussion of PWERM when challenged with several potential solutions. Whether you’re performing calculations with weighted average discount rates, underfunded cash flows, or the inclusion of future rounds, this session will help you confidently power through your next valuation using the Probability-Weighted Expected Return Method.
Program Agenda
Introduction
Overview of OPM v PWERM approaches. When do we use what approach?
Intro to case study
Presentation of company background
Overview of finances and financing
Valuation approach
Case study using OPM
OPM valuation (short presentation on how this would be valued using OPM and the resulting value)
Case study Using PWERM
PWERM valuation (deep dive presentation of how this would be valued using PWERM)
PWERM (outcome) chart
DCF build
Future rounds treatment
Class specific discount rate
Market multiples, M&A multiples, DCF
Use of absolute value rather than multiples in early-stage valuations.
Reconciliation
Learning Objectives
Assess if a OPM or PWERM is most appropriate and obtain familiarity with the PWERM
Use absolute values rather than multiples in the valuation of clinical stage biotech companies
Use a PWERM (outcomes) chart to model future possible outcomes and associated timing and probability
Recognize class specific discount rates and how to apply them
Recognize the issues around how and when to model future financing as part of their PWERM model
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