How do you value a drug?

A drug program’s valuation depends on cost and time of development, probability of technical success at each stage, market size, costs of commercialization, and discount rate. This post will use an interactive valuation model to illustrate how the cost of drug development drives strategy in biotech: why there is so much investment in rare disease research these days, how “personalized medicine” can improve valuations, and how AI can (and cannot) change the “physics” of drug development. These programs can reduce the cost and risk of drug development by letting companies get “conditional approval” with just Phase 2 data, providing more feedback to companies throughout the regulatory process, and allowing companies to conduct smaller clinical studies.

Source: www.baybridgebio.com