Fact Sheet
Valuation of your Early Drug Candidate
Examining the value of early drug candidates is a critical step for researchers seeking to translate their work. BioCurate recommends researchers develop a strong understanding of what constitutes as ‘value’ and how ‘value components’ are used by investors and partners to make decisions and accurately assess early drug candidates.
BioCurate recommends the whitepaper Valuation of Your Early Drug Candidate authored by Linda Pullan, a business development consultant who has worked in the global biopharmaceutical industry for over 20 years. This whitepaper, centred on the valuation of early drug candidates, helps researchers develop a framework to understand the value of their offering. An introduction to the whitepaper is as follows.
Valuation of Your Early Drug Candidate
Biotech companies and researchers frequently seek to partner with large pharmaceutical companies to advance their drug candidates and to raise funds. In the process of finding a partner and negotiating an agreement, a central question arises: What is my drug candidate worth?
The answer to this question often determines the likeliness of an agreement with a large pharmaceutical company and the value of that agreement.
In general, values for early drug candidates will be lower than values for drugs at later development stages, where there is less uncertainty and the time to market is shorter. However, early stage deals are possible. In fact, deals for early assets, still in discovery or preclinical phases, represent a significant proportion of all deals done.
In this context, it is also important to understand industry’s and a potential partner’s perspective on what constitutes a “drug candidate”. For example, it is not typically the output of a high throughput screen. BioCurate provides the expertise to realistically evaluate the status of a molecule.
Value Components
Framework for value components
When determining how to value a complex drug product, it may be helpful to set out a framework for the components of value.
Develop a High-level Framework
Starting with a conceptual framework will help position your valuation. Here are the four key questions a partner or investor asks (Figure 1):
- Is it a strategic fit for us?
- What is the potential?
- What do we spend to get to that potential?
- What are the risks?
Figure 1: Snapshot of evaluation model and how these questions affect calculated value.
How We Can Help
Translating medical research into commercially viable therapies is difficult, time-consuming and expensive. BioCurate is here to work with researchers to help them understand the value of their early drug candidate.
For projects that progress through our pipeline, our team brings the scientific credentials and real-world industry experience that focuses on established biopharma business practices. We focus on mitigating development risks (e.g. target validation, differentiation, clinical and regulatory pathway and IP) and efficient returns on investment by selecting & executing the quickest path to a viable market.
This strict focus on activities, which are known pre-requisites for commercial success, will help drive the potential of agreements with large pharmaceutical companies.
Based on these valuation criteria, BioCurate works closely with researchers and with the University of Melbourne and Monash University to identify the most promising biomedical discoveries and translate them into therapeutics for clinical use.
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