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ri:val Knowledge Base

 

FAQs

> General  
> Valuation in ri:val 
> Technical Details

General

Who uses ri:val?

ri:val is being used by decision makers and analysts in the pharma and biotech industry. Users are business developers, CEOs and CFOs, portfolio managers, BD&L and M&A teams, analysts, and technology transfer officers.

How is ri:val different from other valuation software?

ri:val is specifically conceived for the drug development industry. ri:val applies the most sophisticated valuation methods such as rNPV, real options, and Monte Carlo simulations to projects, licenses, pipelines, technologies, companies, and investment portfolios. ri:val’s user-friendly interface makes valuation easy, quick, and flexible. Avance, as a key opinion leader in valuation, makes sure that current developments in license structures are implemented and industry data are kept up-to-date. There is simply no comparable valuation solution in the life science industry. Some focus on valuation methods (e.g., Monte Carlo simulations) but do not provide any guidelines or data for drug development. Others are relatively inflexible and cannot cope with relatively simple license contracts. ri:val is the only valuation solution integrating project, pipeline, and technology valuation into a 360° company valuation and risk assessment.

How much does ri:val cost?

ri:val is licensed to the customers. The license fee depends on the number of modules included in the license, the number of users, and the industry of the customer. Do not hesitate to ask for a detailed offer.

How is the database updated?

The users can either receive the update package via email and import it to ri:val, or they can download and import it.

How often is the database updated?

Sales figures are updated once every year. Data on costs, success rates, timelines, and epidemiology are updated when new data are available.

What are the sources for the data in the database?

Sources range from annual reports, industry journals, scientific publications, and statistical reviews to industry reports.

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Valuation in ri:val

What valuation methods does ri:val apply?

ri:val uses risk adjusted net present value (rNPV) and real options. rNPV is a discounted cash flows method adapted to industries with attrition rates. Real options is a more sophisticated valuation method that considers the uncertainty of future revenues and possible future management decisions related to this uncertainty. ri:val also uses Monte Carlo simulations to visualize the risk profile of a project or a company. All methods are explained in detail in Avance’s industry guide, “Valuation in Life Sciences.”

What are the standard valuation methods?

rNPV is generally accepted as the standard valuation method. Real options, due its higher complexity, is less popular. Pharmaceutical companies apply real options valuation on a regular basis. Monte Carlo simulations are standard within the whole financial industry. Other often cited methods, such as comparables or payback methods, either serve price finding or are not strongly applicable to drug development.

How is the attrition risk in drug development taken in account?

All cash flows are reduced by the probability that they actually occur. This probability results from the success rates.

Can ri:val value projects with more than one indication?

ri:val can value multi-indication projects, even with the most complex license structures. The user is given the choice of determining in what phase the development path splits up into different indications and how costs, milestones, and royalties are defined between the license partners.

What license structures does ri:val cope with?

ri:val can consider most known license structures such as upfront payments, R&D milestone payments, research funding, commercial milestones, tiered royalties, co-development, sublicensing, license fees, and more. 

How do the Monte Carlo simulations work?

One Monte Carlo simulation is one possible future reality. ri:val simulates clinical and economic success of a project or even a whole company. Each simulation therefore generates different cash flows. These different possible realities are then analyzed in terms of value, liquidity needs, cash flows, and structure. These analyses help in understanding a company’s risk profile.

How do you consider taxes?

ri:val assumes a flat tax rate that becomes effective once all accumulated losses are offset against the first profits.

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Technical details

My data is very sensitive. Is it safe in ri:val?

Yes. ri:val is not Web or server based, but a password protected desktop solution. Nobody else can access your data except you.

Can different users access the valuations?

You can import and export your valuations and share them with colleagues or your negotiation partners. ri:val also allows exporting images and even translates whole calculations into Excel. Users can be restricted in rights.

What are the system requirements?

ri:val runs on Windows XP or higher.

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What's Next

To take advantage of ri:val software or to learn how ri:val can benefit you, contact us by phone or email us at info@avance.ch


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