Valuation of biotechnology firms: A quantitative modelling methodology

Sanjoy Bose, Zayed University

Document Type

Article

Source of Publication

International Journal of Management and Decision Making

Publication Date

1-1-2006

Abstract

The biotechnology sector is regarded as one of the growth engines in the development of the knowledge economy. To sustain this, it is imperative that they continue to attract capital for expansion. An important aspect of raising capital is their ability to impute a fair value on intellectual-assets, which is impeded by the vexatious nature of financial valuation of intangible assets, from which these firms typically derive their value. This study explores the financial and economic issues pertaining to the valuation of new biotech firms, which are evaluated vis-à-vis the value drivers of these firms. The value drivers are tested for significance and hypotheses are formed on their financial, economic and management implications. The investigative process involves using quantitative methods, such as descriptive statistics, logit modelling and multivariate regression, to evaluate the valuation issues in the context of the challenges faced in valuing these potentially high-growth and intellectual-capital intensive firms. Copyright © 2006 Inderscience Enterprises Ltd.

ISSN

1462-4621

Publisher

Inderscience Publishers

Volume

7

Issue

4

First Page

388

Last Page

407

Disciplines

Business

Keywords

Intangible assets valuation, Intellectual capital, Valuation, Value-driver valuation methodology

Scopus ID

33747442776

Indexed in Scopus

yes

Open Access

no

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