ri:val Knowledge Base
GeneralWho 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
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.
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
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.
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.
To take advantage of ri:val software or to learn how ri:val can benefit you, contact us by phone or email us at email@example.com
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