Decomposition of biobuck deals using Risk-adjusted NPV.

Continued reading

Where to follow this work

BioValue has two adjacent publications — subscribe to one, both, or neither depending on what you want to read.

• biovalue.substack.com — deal-by-deal decompositions, methodology pieces, market patterns, framework choices. For BD analysts, buy-side, biotech operators.
• nfosignal.substack.com — the engineering and build process behind BioValue: how the tool is wired up, why specific data sources were chosen, the math, the product decisions. For developers and builders curious about the tool itself.

Three values

What this product does

Every BioValue calculation runs a drug asset through the same three valuations. The differences between them tell you about risk-sharing — not the absolute numbers.

• Asset rNPV

  Standalone risk-adjusted NPV at the acquirer’s WACC, with full peak and full launch probability. Represents the asset’s full economic value owned 100%.

• Commercial-adjusted rNPV

  Same engine re-run at fixed 14% WACC, peak × 0.60, commercial PoS × 0.85. A conservative BD-realistic lower bound.

• Deal PV

  Upfront plus risk-adjusted milestone PV, plus (for licensing deals) the royalty stream PV. Typically sits inside the [Commercial-adjusted, Asset rNPV] range — where it sits communicates risk-sharing intensity.

Features

What’s in the engine

• MIT Project ALPHA PoS

  Phase-transition probability of success benchmarks across 19 therapeutic areas, biomarker-stratified, snapshot 2025-12-28.

• Differentiation flag catalog

  Breakthrough designation, Fast Track, biomarker selection, FIC, BIC, oral-vs-injectable, orphan, and more — applied via two-pass stacking on top of the baseline PoS.

• Indication library

  39 conditions with sourced epi cascades (CDC, SEER, NCCN, ADA, AHA, etc.). Type-ahead search autofills the cascade.

• Bear / Base / Bull scenarios

  Peak revenue × 0.7 / 1.0 / 1.3 with rNPV at WACC × scenario in a sensitivity table.

• Deal Analysis tab

  Range / Waterfall / Calibration data sub-tabs, with seven validated single-asset deal presets for benchmarking.

• localStorage persistence

  Your inputs survive page reloads — bookmark a configured deal and come back to it.

Methodology

The rNPV formula

rNPV = Σ [ CFₜ × P(reach t) / (1 + r)ᵗ ] − Σ R&D-cost PV

R&D costs are probability-weighted by cumulative likelihood of reaching each stage, then discounted at WACC. Commercial revenue is addressable WW peak pool × peak market share × ramp × year-by-year discount × cumulative LoA, with a patent-cliff haircut on terminal years. The full Methodology card lives inside the calculator on the Summary tab.

Citations

Data sources

Calibration

Validation

The model is calibrated against seven single-asset deals signed 2024–2026. Median Deal PV / Asset rNPV ratio across the validation set: 55%.