Evaluating the value of drugs is a complicated practice and requires a deep knowledge of the drug itself, the market currently and in the future, knowledge of cash inflows and outflows and the potential success rates for each stage of drug development. GlobalData has done all of this work for you, leveraging its gold standard Drugs Intelligence database to create high-value NPV models for purchase on a drug-by-drug basis.
Drug Operating Profit Model
(Adapalene + Benzoyl Peroxide + Clindamycin Phosphate) Drug Details
A fixed dose combination of adapalene, benzoyl peroxide and clindamycin phosphate (IDP-126) is under development for the treatment of acne vulgaris. It is a gel formulation applied topically. Clindamycin acts by targeting 23s RNA subunit. Adapalene is a naphthoic acid derivative that targets specific retinoic acid nuclear receptors (gamma and beta) and retinoid X receptors and benzoyl peroxide is an antimicrobial agent.
GlobalData takes into account factors including patent law, known and projected regulatory approval processes, cash flows, potential applicable patients, drug margins, company expenses, and pricing estimates. Combining these data points with GlobalData’s world class analysis creates high value models that companies can use to help in evaluation processes for each drug or company.
|Quick View – (adapalene + benzoyl peroxide + clindamycin phosphate) NPV Data|
|Drug Name||· (adapalene + benzoyl peroxide + clindamycin phosphate)|
|Administration Pathway||· Topical|
|Key Manufacturers||· Bausch Health Companies Inc|
|Drug Development Status||· Phase III|
Reasons to Buy
- Better understand the quantitative value of a specific drug
- Create or support internal NPV models to improve accuracy
- Understand the profit a drug is expected to make, taking into account revenue and cost forecasts leveraging public and proprietary data sets.
Frequently Asked Questions
GlobalData’s NPV Model is a premium model providing a fully-interactive forecasting and valuation tool, driven by Analyst Consensus estimates, enabling users to analyze and customize valuations for pharmaceutical assets including drugs or segments. The tool provides 17-year drug forecasts from companies with sales forecast data in the pharmaceutical industry, including established global firms and emerging biotechs, which allows access to critical information to facilitate strategic decision making around pharmaceutical assets
The NPV Model includes a forecasted Revenue Model, followed by a proprietary Patent Expiry Model, Operating Profit Model, Net Profit (apply Tax rate) and Discounted Cash Flow (apply Discount rates), to derive Net Present Value (NPV) for a chosen pharmaceutical asset
- All drug sales and forecasts within NPV Model are calculated in our proprietary company based models . In these models, Analyst Consensus forecasts are built by using company-specific broker reports to create the sales forecasts for each Drug and Segment.
- Sales and forecasts are not indication-specific where drugs are approved , or in development, for multiple indications. Please refer to GlobalData’s Disease Analysis reports for indication-specific sales forecasts.
- Risk-adjusted NPVs use GlobalData’s LoA and PTSR for the indication in the highest development stage. Please refer to the Likelihood of Approval methodology for more details on this content.
- The NPV Model comprises a 7-year Analyst Consensus forecast derived from GlobalData’s Sales and Forecast tool, and a dynamic three-year historical weighted average forecast algorithm projecting revenues out a further 10 years, producing an overall 17-year forecast span for a chosen asset.
- Forecasts are fully customizable using both a year-on-year growth rate adjustment and a long-term growth rate dampener, which affects the trajectory of the chosen asset. The forecast end date can be changed to shorten the forecast span of an asset if the company has time-limited intellectual property rights.
- The Expiry Model has predetermined drug expiry dates by region. These drug expiry dates are sourced for marketed drugs from GlobalData’s Regulatory Milestones database and for pipeline drugs using a GD proprietary methodology. Multiple erosion rates can be applied to each revenue stream offering a wide range of possible scenarios.
- To generate an NPV for the chosen asset, it is necessary to determine the Drug’s profitability by stripping out its costs. The NPV Model has pre-set company-specific margins for Costs of Goods Sold (COGS), Selling, General, and Administrative (S,G&A) and other expenses, using the latest financial results for that company and GlobalData proprietary methodology. GlobalData updates this margin data annually following the completion of the company’s fiscal year.
- After deducting the Drug’s costs, to generate an NPV for the chosen asset, it is necessary to determine the Drug’s net profit by stripping-out its tax expenditure on earnings. The NPV Model has pre-set company-specific Effective Tax Rate (ETR), using the latest financial results for that company. GlobalData updates this tax rate annually following the completion of the company’s fiscal year.
- After deducting the Drug’s costs, and taxes, to generate an NPV for the chosen asset, it is necessary to determine the Drug’s Discounted Cash Flow (DCF) by using the company’s Weighted Average Cost of Capital (WACC) to account for the time value of money. The WACC is the interest rate that the company is expected to pay on average to all of its security holders in order to finance its assets. It is also referred to as the discount rate which is used to determine the present value of future cash flows. The NPV Model has pre-set WACC rate, using the latest financial results for that company. GlobalData updates this WAAC rate annually following the completion of the company’s fiscal year
- Risk-Adjusted NPV includes the probability that the drug will not be approved and therefore not provide any revenue nor incur costs related to production of a commercialized product (COGS), selling expenses (SG&A) and other expenses related to a marketed drug. As such, the Likelihood of Approval percentage is multiplied by the drug revenue and all selling-related costs.
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