Neuren Media and Analyst Coverage, page-800

I would have to disagree there.

DCF is the gold standard for valuing an asset under any circumstances and most definitely for pharmaceutical assets. I would agree that there are other factors such as competitive advantages, etc that would also come into the equation, but DCF would always be the starting point. Big Pharma like much of big business, will be judged on return on capital, and you can't avoid using a DCF when calculating your return on capital. Hell, the large pharma even publish the discount rates they use in their annual reports (with averages being between 10%-13%). from what I've read it's the ONLY way they value assets.

One research report I have read states 'A survey of large biotech companies found a median discount rate of 10% for evaluating internal R&D projects and external transaction opportunities'. That last phrase is referring to acquisitions.

The great thing about a DCF model which is pretty unique to pharmaceuticals is how accurately you can calculate it - all the numbers you put into the model can be chosen with a reasonable level of confidence from readily accessible information. That is not the case in most other areas of business I believe.

In summary, I think these DCF valuations many are discussing here are exactly the right way to understand how a potential aquirer will be valuing Neuren.