Growing Concerns About Long-Term Risk

As the chase for great assets in biopharma gets tighter, the decision to proceed with a merger, acquisition or strategic transaction usually comes down to price. It’s also likely that both parties to the deal will rely on the standard discounted cash ow (DCF) methodology as the basic criteria to set the value of the asset, reinforced by estimates of future sales growth and market share. Yet while time or duration aspects of value – how long the asset will deliver an optimal return to investors – have signi cant in uence on the ultimate price paid, they are rarely discussed. And why not?