Name
Title | ||
|---|---|---|
Research and Development Project Valuation and Licensing Negotiations at Phytopharm plc |
Abstract | ||
|---|---|---|
We describe a research and development project-valuation model developed for Phytopharm plc, a pharmaceutical development and functional food company based in Cambridgeshire, United Kingdom. Phytopharm uses the model to value the projects in its research and development portfolio, and in licensing negotiations with potential product development and marketing partners. We include different valuation methods, including net present value, decision analysis, and Monte Carlo simulation. We also consider the technological risks of product development, as well as the uncertainty of commercial success. In addition to determining a value for a product in development, the model proposes appropriate licensing contract structures. A typical licensing contract specifies milestone payments and royalties to be paid by the licensee to the licensor. The contract structures adhere to an agreed-upon equitable split of the project value between the two parties. The model also generates critical information during the negotiation meetings, including break-even analyses, trade-offs, and bargaining zones. Phytopharm is currently deploying the model for use with its entire project portfolio. |
Year | DOI | Venue |
|---|---|---|
2007 | 10.1287/inte.1060.0255 | Interfaces |
Keywords | Field | DocType |
potential product development,appropriate licensing contract structure,contract structure,project value,licensing negotiations,present value,pharmaceutical development,phytopharm plc,development portfolio,development project valuation,product development,development project-valuation model,pharmaceuticals,decision analysis,monte carlo simulation,negotiation,drug development,risk | Economics,Project portfolio management,Portfolio,Licensee,Net present value,Valuation (finance),Payment,Operations management,New product development,Negotiation | Journal |
Volume | Issue | ISSN |
37 | 5 | 0092-2102 |
Citations | PageRank | References |
2 | 0.53 | 0 |
Authors | ||
4 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Pascale Crama | 1 | 56 | 4.55 |
| Bert De Reyck | 2 | 547 | 46.23 |
| Zeger Degraeve | 3 | 517 | 45.65 |
| Wang Chong | 4 | 2 | 0.53 |