Pharma / Biotech is one of the most M&A intensive industries. Over a period of approximately 20 years, the industry has spent over USD 1.4 trillion in pharma / biotech acquisitions (excl. generics, OTC, Animal Health, CROs and CMOs acquisitions). The aim of this analysis is to assess which of the acquirers have really gained from…… Continue reading Winners and Losers in Pharma / Biotech Mergers and Acquisitions: Biogen Shines Again
Brand valuation is a major part of business valuation in certain industries such as food & beverage and consumer home products. For example, Coca-Cola’s brand value is estimated at USD 73 bn. (see here), accounting for 40% of Coca-Cola’s current market capitalization. But how does brand valuation apply in the context of pharmaceuticals? In theory, a…… Continue reading Brand Valuation of OTC Pharmaceutical Businesses
In my previous post (see here) I developed a static financial model that incorporated all the necessary parameters to evaluate the potential investment return gain for entrepreneurs and VCs after a successful exit (through M&A). The model incorporated what VCs usually ask from entrepreneurs: a percentage of the firm’s equity in the form of convertible preferred stock,…… Continue reading A Simple VC Investment Model: What Every Biotech Entrepreneur Should Know (Revised)
One of the main challenges Sales & Marketing teams face is how to forecast the revenue of new products. There exist two principal strategies to estimate the sales of new products hitting the market: Primary research: communicating to KOLs and physicians how a new medicine can add value to patients and its potential side effects. Hence, based…… Continue reading Sales Forecasting in the Pharmaceutical Industry
“Shark Tank” is one of my favourite TV Shows. Not only because it is related to the early-stage investment field that is the main driver of major economies but also because it is fun to watch. The way that all interesting (or not) ideas are presented and pitched to high-net worth investors stimulates your mind and makes you…… Continue reading 10 Things I learned from “Shark Tank”
Biotech stocks have demonstrated enormous growth during the past few years (see: The U.S. Small and Mid-Cap Biotech Shines: Stocks on the Rise). The average stock return for biotechs was found to be over 40%, depending on the date of reference during the post-IPO period (see: Post-IPO performance of U.S. Biotechnology Companies). Biotech firms can generate huge stock…… Continue reading Venture Financing Trends in Biotech: A Decade of Healthy Investment Returns
Scientists’ acceptance or rejection of management processes has been historically a controversial issue not only at a corporate level but also at a research level. The method used by a researcher reveals the underlying theory associated with this method and determines to a certain extent the results obtained and hence, their interpretation. In order to frame…… Continue reading Do Scientists accept Management Processes?
Developing a Business Plan (BP) is a very frequent action when companies expect a shift in their strategic direction or desire to have a clearer path in the future. The hardest part in developing a BP is to form a realistic plan in terms of expectations. In addition, a BP shall be understandable and easy to explain to both internal and external stakeholders…… Continue reading Structuring and Developing an Effective Business Plan
Investments are the principal growth driver of our global economy. The motive behind every investment shapes the investment deal structure and therefore plays a significant role on the outcome of every investment. This article highlights the main differences between strategic and financial buyers. Buyers can be classified as investment and corporate buyers. There exist general…… Continue reading A Primer on Determining the Appropriate Type of Investor for your Company
Financial Modelling is both an art and science as it is not only based on Corporate Finance Theory but also on the ability of the Analyst to put theory in practice. This articles describes some common mistakes in Discounted Cash Flow (DCF) valuation, the principal method for valuing a business. Suggestions have been made to deal with these errors…… Continue reading Common Mistakes in Valuation (Discounted Cash Flow)
It is rumored that Pfizer will strike a US$ 101 bn. deal for acquiring AstraZeneca. AstraZeneca’s market capitalization prior to these rumors (17.04.2014) was US$ 80 bn. If these rumours are true it means that Pfizer is offering 25% premium over the market capitalization of AstraZeneca. Is this a fair price? Normally, the price offered…… Continue reading Pfizer AstraZeneca M&A Rumors – Is US$ 101 bn. the Right Price?
Forecasting is a major challenge when it comes to budgeting, business planning or even valuation. In order for a Company to make future projections it has to have a good grasp of the market, its competitors as well as its own strengths and weaknesses. I have identified the following factors that a company executive can…… Continue reading How to challenge your Company’s forecasts