Application of real options analysis for pharmaceutical R&D project valuation—Empirical results from a survey
نویسندگان
چکیده
Real options analysis was often recommended as an emerging valuation technique for high-risk investment projects. Former inter-sectoral surveys have drawn an ambivalent picture of real options usage in general. In addition, there is a lack of sector-specific investigations. In the following article the results of an in-depth analysis of collected empirical data regarding the application of this new tool in the pharmaceutical sector is presented by capturing the internal view from the pharmaceutical companies themselves and the external view from the health care departments of financial service firms. R&D stage specific modi of application, reasons for reluctance in the employment of real options and their assumed future prospects are elucidated. © 2006 Elsevier B.V. All rights reserved.
منابع مشابه
Computing optimal subsidies for Iranian renewable energy investments using real options
For the valuation of the renewable energy investments, providing private investors with a financial incentive to accelerate their investment is a very significant issue. Financial subsidies are known by the majority of the people to be one of the most important drivers in renewable energy expansion and one of the main reasons which result in the development of any industry. In this paper, we pr...
متن کاملRisk Management in Real Options Based Pharmaceutical Portfolio Planning
Recent research efforts in options pricing have shown that real options approaches are more appropriate for R&D project valuation because they account for the value of managerial flexibility to react to arising contingencies during R&D development. This technique allows for strategic decision-making in the context of hedging opportunities present in the financial markets by tracking the uncerta...
متن کاملA Fuzzy Real Options Model for R&d Project Evaluation
A major advance in development of project selection tools came with the application of options reasoning to R&D. The options approach to project valuation seeks to correct the deficiencies of traditional methods of valuation through the recognition that managerial flexibility can bring significant value to a project. The main concern is how to deal with non-statistical imprecision we encounter ...
متن کاملSituation Analysis of R & D Activities: An Empirical Study in Iranian Pharmaceutical Companies
As global competition intensifies, research and development (R & D) organizations need to enhance their strategic management in order to become goal-directed communities for innovation and allocate their resources consistent with their overall R & D strategy. The world pharmaceutical market has undergone fast, unprecedented, tremendous and complex changes in the last several years. The pharmace...
متن کاملSituation Analysis of R & D Activities: An Empirical Study in Iranian Pharmaceutical Companies
As global competition intensifies, research and development (R & D) organizations need to enhance their strategic management in order to become goal-directed communities for innovation and allocate their resources consistent with their overall R & D strategy. The world pharmaceutical market has undergone fast, unprecedented, tremendous and complex changes in the last several years. The pharmace...
متن کامل