Case Study: Life Sciences Valuation

The Life Sciences Valuation Challenge

A large diversified chemical company made a strategic decision to potentially divest one of its pharmaceutical related business units that lay outside its core strengths. In order to understand the potential sales returns and to develop a sales strategy, it needed to provide a life sciences valuation of the complex business.

The Solution

The valuation started with a due diligence phase when PharmaVentures investigated all the components of value including the markets, the manufacturing capabilities/facilities, the patents, the scientific skills, the impact of investments on future revenue streams and profitability. Furthermore, PharmaVentures developed a financial model using discounted cash-flow/expected net present value calculations. Potential divestment scenarios (outright sale, medium term earn-out) were also considered.

The client used the outputs to confidently seek out appropriate buyers and negotiate the most attractive terms.