Market Sizing & Forecasting
The component of greatest importance in valuing an asset is an understanding of the potential market size, and forecasting the revenues for that sector as well as for a specific product within that environment. Market size is the topmost value driver of licensing and M&A deals. It should, therefore, should be considered before any significant partnering decision is made. Developing a view on the size of a whole therapy area, especially if that disease and the associated therapies are well known and established, is not so difficult. The large number of research reports that are available to purchase provide a good first feel about the attractiveness of the target market. However; the challenging part is to define the specific position, market share or growth of an innovative compound that is still early in the R&D process. How will the innovation be received? Can it replace existing therapies? Will regulators view the profile favourably? How will the new market entrants and other innovations impact the chances of the compound? All these questions need to be answered to provide a forecast that will allow decent management decisions to be made.
Market Sizing and Forecasting Diagram
©PharmaVentures 2008, Click image to enlarge
PharmaVentures has long-standing experience in addressing the potential value of new technologies and novel therapeutic approaches under conditions of high uncertainty. Rigorous, bottom-up, epidemiology-based forecasting serves as a platform for our valuation expertise. We carefully consider the negative impact of competition and of potential shifts in related therapies to produce a most realistic and highly reliable forecast.