In the life sciences, investment decisions for R&D projects, licensing deals and mergers are often based on traditional valuation approaches that depend on assumptions about development time, cost and future revenues. These value calculations – and the resulting management decisions based on them – can determine a project’s fate and affect its development process. However, they rarely take into account scientific considerations specific to that project. Therefore, researchers from ZonMw, Paul Janssen Futurelab Leiden and CHDR have introduced an alternative valuation method based on real option analysis (ROA), that integrates financial project valuation with scientific considerations for critical path-finding in product development. This approach was termed ‘question-based clinical development’ (QBCD) method.
The QBCD method has now been fully described for the first time in the latest issue of Nature Biotechnology. You can read the full article for free here.