@inproceedings{5983fe351f1741ecb40cce7054865ac1,
title = "A compound option valuation model of R&D-Intensive Pharmaceutical companies",
abstract = "This paper presents a model for the valuation of R&D in the pharmaceutical sector, both for start-up ventures as well as for big conglomerates. The key understanding is that these projects can be seen as growth options. Traditional valuation techniques as DCF-analysis fail in valuing R&D-intensive pharmaceutical companies because most of their value is embedded in unexercised real options whose future value is uncertain at this moment If one considers a company as a portfolio of real options, one can value the company based on a compound option model. This estimate will better reflect the fundamental value of the company and cannot be captured by DCF-analysis.",
keywords = "Compound option model, Pharmaceutical, R&D, Real options",
author = "Danny Cassimon and Engelen, {Peter Jan}",
year = "2005",
language = "English",
isbn = "0780383834",
series = "8th Korea-Russia International Symposium on Science and Technology - Proceedings: KORUS 2004",
publisher = "Tomsk Polytechnic University",
pages = "209--212",
booktitle = "8th Korea-Russia International Symposium on Science and Technology - Proceedings",
address = "Russian Federation",
note = "8th Korea-Russia International Symposium on Science and Technology, KORUS 2004 ; Conference date: 26-06-2004 Through 03-07-2004",
}