If the business model of the modern pharmaceutical industry did not already exist, management consultants and business schools would surely have invented it as a fictional basis for exploring the challenges posed by a perfect storm of every conceivable risk and uncertainty.
It is perhaps doubtful whether investors, managers and analysts would have believed that any business model embodying such a perfect storm would be sustainable and therefore worth studying at all – were it not for the fact that in the pharmaceutical industry, real life really is stranger than fiction.
Nowhere are all the risks and uncertainties confronting the pharmaceutical industry more clearly or comprehensively exposed to view than in the process of valuation.
This one-day intensive Pharmaceutical Company Valuation workshop begins with an in-depth analysis of the pharma business model itself, and then explores in detail the theoretical and practical barriers to the application of the most widely employed valuation metrics and methods.
It locates common pitfalls, and shows how a judicious selection of ‘horses for courses’ can help us to establish at least a conditional range for possible valuations in different contexts.
The Pharmaceutical Company Valuation course is ‘intensive’ rather than ‘advanced’, in the sense that it is strongly interactive in tone and structure (Excel-based exercises figure prominently, especially in the second half), yet it assumes no more than a basic understanding of financial statements and of a few of the most widely used measures of financial performance and condition, such as return on capital and p/e ratio.
As the participants are being asked to ‘unlearn’ much of their previously unchallenged conventional wisdom, those who come to the table with less ‘inherited baggage’ might even have an advantage!
The trainer of this workshop regularly covers the entire spectrum of topics under the general headings of financial accounting, reporting, management, analysis and communication. Evaluating a pharmaceutical company falls under these varied umbrellas.
His interests range from the technical detail of IFRS and GAAP accounting to the ‘dark arts’ of impression management in the ‘front half’ of company reports. He has a special interest in the use of KPIs and of alternative ‘underlying’ or ‘pro forma’ performance measures for communication with investors. He also provides specialised training in financial modelling and valuation, and in the effective presentation and communication of financial information. Prior to becoming a trainer, he had worked as a group finance manager for one of the UK’s leading industrial and commercial real estate investment companies, and then subsequently as the treasurer of a subsidiary of Deutsche Bank.
Overview of conventional models: their general strengths and weaknesses, when they work best – and when they work least well
How conventional valuation models are challenged by the pharma model, as for instance:
Finding a way forward
Basic tips and tricks for constructing an Excel-based valuation that is at once comprehensive, coherent, consistent and flexible
Participants will work in small groups on a comprehensive valuation exercise under the close supervision of the trainer, who will help resolve individual problems while acting as a channel for sharing each group’s insights and experiences with the class as a whole.
The workshop concludes with presentations by one or more of the groups to the class as a whole, in an exercise designed not only to give them self-confidence in their technical skills but also to enhance their ability to communicate their findings to colleagues.
What our clients are saying about the international trade finance course
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