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Volume 7, Issue 3(Suppl) J Biotechnol Biomater, an open access journal
ISSN: 2155-952X Euro Biotechnology 2017
September 25-27, 2017
17th EURO BIOTECHNOLOGY CONGRESS
September 25-27, 2017 Berlin, Germany
Mark Nuijten, J Biotechnol Biomater 2017, 7:3(Suppl)
DOI: 10.4172/2155-952X-C1-076
Early phase value scan for biotechnology innovation
Mark Nuijten
A2M, Netherlands
Background: Registration of a medicinal product by EMA or FDA used to be the main determinant for the future sales forecast
of the product and would justify a higher valuation of the share of the company, especially for a biotech company with only a
limited number of products. Contrary, new emerging requirements for reimbursement authorities, payers and drug policy changes
are increasingly going to determine the actual future sales and the actual post-launch costs. The current most important criteria for
coverage decisions are effectiveness, cost-effectiveness and budgetary impact, which are taken into consideration to make a value for
money decision. As the future financial performance of a pharmaceutical company is directly related to the free cash flow of a new
drug, an appropriate assessment of the potential sales forecast of a portfolio of forthcoming new drugs is an important predictor of the
economic value of a pharmaceutical company. Today, such an assessment should include the estimated effects of the new emerging
requirements for reimbursement authorities, payers and the effects of other pharma policy changes, as pay-for-performance based
financial agreements.
Objective: This presentation aims to provide a strategic value scan for biotechnology products at the early onset of the development
program considering the emerging hurdles for market access. The application of the early phase scan will be based on a hypothetical
new innovative drug in breast cancer.
Methods: The outcomes of the strategic value scan are determined by the key decision criteria: efficacy and safety, cost-effectiveness,
budget impact and additional criteria may be included depending on the disease area. The input of the strategic scan is based on a
sales forecast model, a cost-effectiveness model, and a pricing model, which are interacted and executed simultaneously. The strategic
value scan will provide guidance on the position of the new product in the treatment pattern for each scenario and the expected
comparators in each position. The cost-effectiveness model and pricing model will provide upper limits for the pricing potential for
each scenario and the expected comparators in each position. These outcomes can be linked with a discounted cash flow model to
optimize the economic value of the biotechnology company taken into considerations the hurdles for reimbursement and market
access. The value scan includes various scenarios (e.g. negative, base case and optimistic) for the expected clinical profile of the
new product and the positioning of the new product in the treatment pattern (e.g. 1-line, 2-line, 3-line treatment). It is important
to predict the incremental benefit of the new product versus the relevant expected comparators at each possible position. Changes
in design of the forthcoming clinical trial or positioning of the new product may increase the economic value of the company. For
example, health economic data (effectiveness and resource utilisation) may be collected alongside the forthcoming clinical trial,
which may be used as input for the health economic models.
Conclusion: We present a novel approach for the early phase valuation of biotechnology products from a broader perspective by
bridging concepts from health economics, market access, pricing and the economics of business economic valuation.
Biography
Mark Nuijten trained as a Physician and worked in clinical practice before completing an international MBA from Erasmus University, Rotterdam. He completed his
PhD in Health Economics at the Erasmus University, Rotterdam, in 2003 and the thesis entitled as “In search of more confidence in health economic modeling”. He
was Board Director of ISPOR (2002-2004) and Chair of the Management Board of Value in Health (2002-2004). He is a pioneer in the field of Healthcare Innovation
in Biotechnology and Nutrition, and has been the first classical health economist successfully applying and developing sales forecast methodologies for valuation
of biotechnology companies. Prior to setting up A2M, he was a partner with MEDTAP International. As a VP Business Development for Europe, he established
global Pricing and Reimbursement Consultancy Services for MEDTAP. Before MEDTAP, he was a Managing Director of the Quintiles office in the Netherlands.