Valuing biotechnology companies using the price earnings ratio

2006 ◽  
Vol 12 (4) ◽  
Author(s):  
Jacqueline Loh ◽  
Robert Brooks
Keyword(s):  
Product Development ◽  
Time Horizon ◽  
Life Sciences ◽  
Portfolio Construction ◽  
Lead Times ◽  
Price Earnings Ratio ◽  
Biotechnology Companies

The biotechnology and life sciences sectors are a source of major source of growth in the economy. However the valuation of companies in the sector is problematic owing to the long lead times and uncertainty associated with product development. This paper explores the use of the price earnings ratio as a tool for portfolio construction and valuation. Our results suggest this is a poor tool, although this may be due to being constructed over a time horizon that is too short.

scholarly journals The Effect of Longer Development Times on Product Pipeline Management Performance

2015 ◽  
Vol 19 (4) ◽  
pp. 461-485 ◽  
Author(s):  
Paulo S. Figueiredo ◽  
Xisto L. Travassos ◽  
Elisabeth Loiola
Keyword(s):  
Product Development ◽  
Policy Implications ◽  
Optimal Decision ◽  
Lead Times ◽  
Dynamics Model ◽  
Development Times ◽  
Pipeline Management ◽  
Biotechnology Companies ◽  
Development Pipeline ◽  
Product Pipeline

In the pharmaceutical industry, value is being destroyed through longer product development times. Given that patent lives are (normally) fixed at 20 years, the double hit of increasing time to market is evident - higher R & D costs and less time at market before generic competitors are able to be released into the marketplace. The Policy implications are massive: A huge and permanent shift away from internal R & D towards partnerships, licensing deals and acquisitions of more innovative biotechnology companies. In this study, we build a system dynamics model of the product development pipeline for a single company operating in the pharmaceutical market. The study shows that in the presence of loss of value due to longer lead times, it is more advantageous to: (a) work faster to reduce the backlog of projects; (b) increase the number of projects started whenever it is possible reduce complexity in the pipeline; and also (c) the optimal decision on resource allocation is independent of the loss of value due to longer lead times.

Designing for Time-to-Market: Predicting the Effects of Product Design on Production Rate

1999 ◽  
Author(s):  
Manish K. Govil ◽  
Edward B. Magrab
Keyword(s):  
Product Development ◽  
Production Rate ◽  
Time Horizon ◽  
Software Tool ◽  
Lead Times ◽  
Manufacturing Processes ◽  
Time To Market ◽  
Development Cycle ◽  
Assembly Structure ◽  
Product Development Cycle

Abstract This paper presents a methodology and a corresponding software tool for estimating a product’s production rate very early in the product development cycle. It evaluates the product’s proposed geometric attributes, materials, manufacturing processes, vendors and assembly methods for each of its components with respect to its affect on the production rate. It does this evaluation by first interactively converting the product’s functional decomposition into a product structure and then into an assembly structure. Then, based on a factory’s resource allocations and vendors’ lead times over the time horizon of interest it computes the production rate, identifies those components that are critical to increasing the production rate and suggests means to improve the fit between the product’s design and the production system. For the example selected it is shown that the methodology indicates that one can increase the production rate by 100% by either (i) modifying the thickness of one component and changing the manufacturing scheme of two other components, or (ii) changing the manufacturing scheme of three components out of the 20 components in the product.

Virtual Clutch Development Model

2007 ◽  
Author(s):  
Lina J. Lundquist ◽  
Franz Eberle ◽  
Mikael B. Mohlin ◽  
Rainer Sponsel
Keyword(s):  
Product Development ◽  
Product Quality ◽  
New Product Development ◽  
New Technology ◽  
Development Model ◽  
Lead Times ◽  
Automotive Company ◽  
Clutch System ◽  
New Ideas ◽  
Development Approach

In a world of constant development and where competition grows stronger for every minute, there is a need to work smart to stay on the market. Product development in the automotive business is not an exception. It is though not enough to adapt new technology and new ideas, one has to apply it to the organization in the smartest way to be able to achieve one of the most wanted goals; shortened lead-time in combination with improved product quality. As well known, virtual prototyping is a mean to achieve the above stated goal. This paper describes how this method has been the basis for a new product development approach in the clutch system area in an automotive company. The new virtual development approach is enabled by creation of the Virtual Clutch Development Model (VCDM). The main benefit of the simulation model is that several clutch performance phenomena can easily be investigated at once to get an overview of the performance of the clutch system, this in an early phase of the development process. This will facilitate trade off decisions and avoid suboptimization and thus shorten lead-times and improve product quality.

Biotechnology Portals in Medicine

2011 ◽  
pp. 89-93 ◽  
Author(s):  
Yoosuf Cader
Keyword(s):  
Measuring Equipment ◽  
Sequence Data ◽  
Life Sciences ◽  
Molecular Medicine ◽  
Publicly Traded ◽  
Systems Biotechnology ◽  
Disease Research ◽  
Stock Value ◽  
Bioinformatics Software ◽  
Biotechnology Companies

The 2005 global revenues of publicly traded biotechnology companies have grown by 18.1% to $63.1 billion (Donn, 2006). Many countries are now investing in research and development in the biotechnology industry as it is believed this 30 year-old industry is moving toward profitability. The stock value in this industry has outperformed the average stock value in many countries. In the pre-genomic era, a typical life sciences company would have marketed diagnostic kits, assays, chemicals, measuring equipment, and research products to name a few. In the genomic era, a new range of products is marketed focusing on molecular medicine. Among these new products are bioinformatics software solutions, storage systems, biotechnology systems, and solutions researching into genes and proteins, tools for analysis of genetic sequence data, integrated systems and solutions for disease research, and new drug discovery (Cader, 2004). The need for biotechnology portals is now more than justified and will be a useful information and knowledge source.

Low Volume Plastics Manufacturing Strategies

2007 ◽  
Vol 129 (12) ◽  
pp. 1225-1233 ◽  
Author(s):  
Ruchi Karania ◽  
David Kazmer
Keyword(s):  
Injection Molding ◽  
Product Development ◽  
Lead Time ◽  
Development Time ◽  
Numerical Control ◽  
Production Costs ◽  
Lead Times ◽  
Total Production ◽  
Fused Deposition ◽  
Production Quantity

Plastic components are vital components of many engineered products, frequently representing 20–40% of the product value. While injection molding is the most common process for economically producing complex designs in large quantities, a large initial monetary investment and extended development time are required to develop appropriate tooling. For applications with lower or unknown production quantities, designers may prefer another process that has a lower development cost and lead time albeit with higher marginal costs and production times. A methodology is presented that assists the designer to select the most appropriate manufacturing process that trades off the total production costs with production lead times. The approach is to develop aggregate component cost and lead-time models as a function of production quantity from extensive industry data for an electrical enclosure consisting of two components. Binding quotes were secured from multiple suppliers for a variety of manufacturing processes including computer numerical control machining, fused deposition modeling, selective laser sintering, vacuum casting, direct fabrication, and injection molding with soft prototype and production tooling. The methodology yields a Pareto optimal set that compares the production costs and lead times as a function of the production quantity. The results indicate that the average cost per enclosure assembly is highly sensitive to the production quantity, with average costs varying by more than a factor of 100 for production quantities varying between 100 and 10,000 assemblies. Each of the processes is competitive with respect to total production cost and total production lead time under differing conditions; a flow chart is provided as an example of a decision support tool that can be provided to assist process selection during the product development process and thereby reduce the product development time and cost.

Creativity Just in Time? The Role of Delivery Precision in Product Development

2015 ◽  
Vol 12 (05) ◽  
pp. 1550026
Author(s):  
Katarina Lund Stetler
Keyword(s):  
Product Development ◽  
Automotive Industry ◽  
Lead Time ◽  
Project Planning ◽  
Survey Study ◽  
Just In Time ◽  
Lead Times ◽  
The Creation ◽  
The Relationship

This paper presents the results from a quantitative survey study in the research and development (R&D) department of company in the automotive industry. The focus of the study has been on exploring the relationship between delivery precision and creativity. Given today's increasingly competitive market, companies must be able to both cut lead times and maintain high creativity and innovativeness in the organization. This study is an attempt to increase our understanding of how one means of cutting lead time, the imposition of high demands on delivery precision, is related to the creation of novel ideas in the industrialization phase of product development. The results point to an interesting relationship in which the imposition of high demands on delivery precision actually increases the perception of the creation of novel ideas. The results have implications for project planning and the role of time dedicated to exploratory tasks in product development.

Engineer-To-Order Product Development

2016 ◽  
pp. 43-59
Author(s):  
Richard Addo-Tenkorang ◽  
Petri Helo ◽  
Jussi Kantola
Keyword(s):  
Product Development ◽  
Competitive Advantage ◽  
New Product Development ◽  
Information Exchange ◽  
Lead Times ◽  
Sustainable Competitive Advantage ◽  
Systems Architecture ◽  
Complex Product ◽  
Process Improvements ◽  
Engineer To Order

Industrial manufacturers' complex product-development activities have seen various advancement and improvement approaches over the past decades. In order to enable the implementation of efficient and effective product-development support processes in the quest of achieving shorter product development lead-times and higher return on investments (ROIs). Engineer-To-Order (ETO) product capacity projects, including large electric machine, huge centrifugal pumps, Diesel/Natural fuel power plant engines, steam turbine, boiler, ship, etc., have challenges concerning their long product-development lead-times. The challenges confronting these enterprises industrial Original Equipment Manufacturers (OEMs) are enormous with one of the major ones being the effective and efficient network or flow of technical communication among the main stakeholders for complex / new product-development. Moreover, with all the industrial manufacturing complex product-development process improvements, in terms of complex engineering design and delivery, there are still a lot more variances to be addressed on the ‘better, faster and cheaper' paradigm. Furthermore, attention is needed on efficient information exchange systems as well as effective operational communication in their complex product-development processes for a sustainable competitive advantage. Therefore, this paper presents a proposed optimum conceptual information technology systems' architecture towards enhancing an industrial sustainable competitive advantage: By employing social network theory (SNT) analysis to advise on a strategic and effective communication network for industrial supply-chain (SC) sustainable competitive advantage.

Constructing a processual model of communication in new product development from a multiple case study of biotechnology SMEs

1969 ◽  
Vol 13 (3) ◽  
Author(s):  
Jennifer Frahm ◽  
David C Ireland ◽  
Damian Hine
Keyword(s):  
Product Development ◽  
New Product Development ◽  
Information Seeking ◽  
Success Factors ◽  
Multiple Case Study ◽  
New Product ◽  
Limited Attention ◽  
Multiple Case ◽  
Biotechnology Companies

For most companies in the biotechnology industry, the core business is new product development (NPD). Indeed, there are still very few companies that have products that have reached the market. Research into NPD in biotechnology companies has largely focussed on success factors rather than the processes of NPD. One area receiving limited attention is the role of organisational communication in NPD. The authors of this study address this oversight in undertaking a multiple case study analysis of internal and external communication in NPD processes in biotechnology. The resultant framework for communication in NPD in biotechnology companies combines both structural and processual elements of communication. The authors found that the process of communication in NPD is essentially an information seeking and uncertainty reduction activity that occurs through both the internal and external environments of the firm. The framework is a hybrid of cross-functional, decision stage and network models.

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