VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY
Biotechnology is one of the most intensive industries in the past few decades. Essence of their operations leads to problem of determining the value of biotechnology companies, because in addition to their existing value, future product, market opportunities and intangible assets are difficult to v...
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| Format: | Article |
| Language: | English |
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Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt
2012-03-01
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| Series: | Ekonomika Poljoprivrede (1979) |
| Subjects: | |
| Online Access: | https://www.ea.bg.ac.rs/index.php/EA/article/view/594 |
| _version_ | 1797825086939463680 |
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| author | Isidora Ljumović Janko Cvijanović Jelena Lazić |
| author_facet | Isidora Ljumović Janko Cvijanović Jelena Lazić |
| author_sort | Isidora Ljumović |
| collection | DOAJ |
| description |
Biotechnology is one of the most intensive industries in the past few decades. Essence of their operations leads to problem of determining the value of biotechnology companies, because in addition to their existing value, future product, market opportunities and intangible assets are difficult to value. Biotech companies dont have a standard format, and simple techniques, such as financial statements analysis or discounted cash flows cannot be applied. Due to the complexity of their work and high levels of risk, alternative method such as real options is applied. The concept of financial options can be extended to the valuation of investment opportunities in commercial companies, especially in biotech. This paper explains how real options provide various perspectives on the project (investment) value in relation to situations in which the project is: delayed, expanded, abandoned, business is contracted, operations are switched, products with multiple applications are grown, and optimal date for the product launch is determined.
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| first_indexed | 2024-03-13T10:47:52Z |
| format | Article |
| id | doaj.art-052ba6676d1c4f48819f4678c833c58b |
| institution | Directory Open Access Journal |
| issn | 0352-3462 2334-8453 |
| language | English |
| last_indexed | 2024-03-13T10:47:52Z |
| publishDate | 2012-03-01 |
| publisher | Naučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, Bukurešt |
| record_format | Article |
| series | Ekonomika Poljoprivrede (1979) |
| spelling | doaj.art-052ba6676d1c4f48819f4678c833c58b2023-05-17T16:59:30ZengNaučno društvo agrarnih ekonomista Balkana, Beograd; Institut za ekonomiku poljoprivrede, Beograd i Akademija ekonomskih nauka, BukureštEkonomika Poljoprivrede (1979)0352-34622334-84532012-03-01591VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTYIsidora Ljumović0Janko Cvijanović1Jelena Lazić2Economics Institute, BelgradeEconomics Institute, BelgradeEconomics Institute, Belgrade Biotechnology is one of the most intensive industries in the past few decades. Essence of their operations leads to problem of determining the value of biotechnology companies, because in addition to their existing value, future product, market opportunities and intangible assets are difficult to value. Biotech companies dont have a standard format, and simple techniques, such as financial statements analysis or discounted cash flows cannot be applied. Due to the complexity of their work and high levels of risk, alternative method such as real options is applied. The concept of financial options can be extended to the valuation of investment opportunities in commercial companies, especially in biotech. This paper explains how real options provide various perspectives on the project (investment) value in relation to situations in which the project is: delayed, expanded, abandoned, business is contracted, operations are switched, products with multiple applications are grown, and optimal date for the product launch is determined. https://www.ea.bg.ac.rs/index.php/EA/article/view/594RiskReal optionsValuationBiotechnology |
| spellingShingle | Isidora Ljumović Janko Cvijanović Jelena Lazić VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY Ekonomika Poljoprivrede (1979) Risk Real options Valuation Biotechnology |
| title | VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY |
| title_full | VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY |
| title_fullStr | VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY |
| title_full_unstemmed | VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY |
| title_short | VALUATION OF BIOTECHNOLOGY COMPANIES: REAL OPTIONS APPROACH UNDER UNCERTAINTY |
| title_sort | valuation of biotechnology companies real options approach under uncertainty |
| topic | Risk Real options Valuation Biotechnology |
| url | https://www.ea.bg.ac.rs/index.php/EA/article/view/594 |
| work_keys_str_mv | AT isidoraljumovic valuationofbiotechnologycompaniesrealoptionsapproachunderuncertainty AT jankocvijanovic valuationofbiotechnologycompaniesrealoptionsapproachunderuncertainty AT jelenalazic valuationofbiotechnologycompaniesrealoptionsapproachunderuncertainty |