Value creation in life sciences – 7
The idea of this video is 2 fold : 1. Understand in what ways you cannot value a biotech asset ( subtractive knowledge) – It makes one’s life easy 2. Understand whats the best way you could assess the potential…
Value creation in life sciences – 6
In this video we discuss that we should be focussing more on cash flows if we really want to do a good valuation because most of the errors lie there and not spend too much time on identifying what discount…
Value creation in life sciences – 5
In this video we discuss how a biotech company can be capital efficient. To explain that we give an analogy of history – how Francisco Pizzaro with just a small army defeated Atahualpa of Cajamarca that had an army 5x…
Value creation in life sciences – 4
In this video we talk about what is meant by cost of capital or discount rate or hurdle rate, explain what Return on invested capital is and finally the Power law. A Biotech CEO is supposed to know not only…
Value creation in life sciences – 3
In this video, we discuss if an early stage valuation is about XL modelling? or more than that. A good valuation is a mix of a sound narrative and numbers.
Value creation in life sciences – 2
In this video we discuss what happens when price exceeds value. Can the market sustain it? What would be the consequence if all companies raising money talk about the big market potential leading to market delusion. So if you are…
Value creation in life sciences – 1
In this video, we talk about the differences between value and price. Why an investor would invest at your pre money valuation
The Valuation Dilemma: VCs vs Pharmaceutical Companies
I had an interesting discussion with one of the biotech entrepreneurs last week. He was curious to see that when he discusses the value of his product with the VCs, he gets a very different value. On the other hand…
Oh! these risk premiums for emerging markets!!!
These were the exact words from the management of a biotech company based in an emerging market when we were negotiating a deal with them. The company was supposed to in license the product, develop it and launch in its…
Who are the marginal investors in your company?
Risk is an integral part of valuation. When we try to value a company or equity, we use the cost of capital or the cost of equity as the discount rate. For equity investors, the cost of equity is the…
