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Valuing Post-Revenue Biopharmaceutical Assets with Pfizer's Current Portfolio as a Case Study

Author

Listed:
  • Yongzhuo Chen
  • Yixuan Liang
  • Yiran Liu
  • Brian Hobbs
  • Michael Kane

Abstract

This research paper addresses the critical challenge of accurately valuing post-revenue drug assets in the biotechnology and pharmaceutical sectors, a key factor influencing a wide range of strategic operations and investment decisions. Recognizing the importance of reliable valuations for stakeholders such as pharmaceutical companies, venture capitalists, and private equity firms, this study introduces a novel model for forecasting future sales of post-revenue biopharmaceutical assets. The proposed model leverages historical sales data, a resource known for its high quality and availability in company financial records, to produce distributional estimates of cumulative sales for individual assets. These estimates are instrumental in calculating the Net Present Value of each asset, thereby facilitating more informed and strategic investment decisions. A practical application of this model is demonstrated through its implementation in analyzing Pfizer's portfolio of post-revenue assets. This precision highlights the model's potential as a valuable tool in the financial assessment and decision-making processes within the biotech and pharmaceutical industries, offering a methodical approach to identifying investment opportunities and optimizing capital allocation.

Suggested Citation

  • Yongzhuo Chen & Yixuan Liang & Yiran Liu & Brian Hobbs & Michael Kane, 2023. "Valuing Post-Revenue Biopharmaceutical Assets with Pfizer's Current Portfolio as a Case Study," Papers 2312.02250, arXiv.org.
    • Handle: RePEc:arx:papers:2312.02250
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    References listed on IDEAS

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    1. Rink, David R. & Swan, John E., 1979. "Product life cycle research: A literature review," Journal of Business Research, Elsevier, vol. 7(3), pages 219-242, September.
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