Biotech valuation calculator

The easiest way for biotech founders and investors build robust, accurate financial models



Provide basic info about your company, and we'll automatically build a DCF model in Excel.

Tweak your model in the browser, and when you're ready, download a fully functional Excel model, dynamically updated with your inputs.

or use the free version below



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Add your model inputs


Add your model inputs below. You can see how changes to inputs impact valuation on the right side of the page.

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Something you'd like to model that we haven't included here? You can always download the spreadsheet of the model and tweak as needed. Or contact us to request we add a feature.





General info +


Category Default value Input
Company name Therapeutics Company
First forecast year 2023
Discount rate 10%
Platform value $100M

Products +


Adding products or indications requires a subscription

Product 1

Category Default value Input
Product name Product 1
Patent expiry year 2047
Indication 1 Indication 1
Indication 1 stage Target-to-hit



Product R&D +


If a stage does not apply to your product (i.e. getting accelerated approval post-Phase 2 and skipping P3), enter 0 for the time and cost of the stage, and 100% for p(TS))

The model does not include preclinical costs for the any indications other than the lead indication. Once a molecule is in the clinic for the lead indication, other indications can enter the clinic without incurring additional preclinical costs.

Product 1

Indication 1

Pre-human studies

Category Default value Input
Target-to-hit cost $2.1M

Target-to-hit time 1 years

Target-to-hit p(TS) 80%

Hit-to-lead cost $5.3M

Hit-to-lead time 2 years

Hit-to-lead p(TS) 75%

Lead optimization cost $21.0M

Lead optimization time 2 years

Lead optimization p(TS) 85%

Preclinical development cost $10.5M

Preclinical development time 1 years

Preclinical development p(TS) 69%



Indication 1

Human studies

Category Default value Input
Phase 1 cost $34.7M

Phase 1 time 2 years

Phase 1 p(TS) 60%

Phase 2 cost $80.4M

Phase 2 time 2 years

Phase 2 p(TS) 36%

Phase 3 cost $350.2M

Phase 3 time 3 years

Phase 3 p(TS) 62%

FDA submission cost $54.9M

FDA submission time 1 years

FDA submission p(TS) 90%



Revenue +


Product 1

Category Default value Input
Price in year product is launched $50,000
Annual price increase % 5%

Product 1

Indication 1

Category Default value Input
Peak patients treated / year 50,000
Years from launch to peak sales 5 years

Costs and expenses +



P&L costs and expenses


Category Default value Input
COGS % of sales 10%
Gross-to-net discount 10%
SG&A % of sales 30%
Tax rate 20%

Annual platform R&D

Calculated as max of 1) % of sales or "Platform R&D in year 1" * growth rate


Category Default value Input
Platform R&D in year 1 ($M) $10M
Annual % growth in platform R&D 5%
Platform R&D % sales 5%

Launch costs (SG&A)


Launch costs are in addition to the SG&A expense defined above

Product 1

Indication 1

Category Default value Input
Launch year - 3 ($M) $25M
Launch year - 2 ($M) $35M
Launch year - 1 ($M) $75M
Launch year ($M) $100M
Launch year + 1 ($M) $100M

Cash flow and DCF +



Capex and depreciation

Capex calculated based on % of sales post-approval; otherwise grows at fixed rate per year

DCF does not include terminal value


Category Default value Input
Capex in year 1 1.0
Capex annual growth rate 5%
Capex % of sales 1%
PP&E useful life (years) 20
PP&E salvage value as % of original value 20%

Working capital


Category Default value Input
Accounts receivable % sales 15%
Inventory % of COGS 4%
Prepaid expenses % SG&A 1%
Other current assets % sales 1%
Accounts payable % COGS 20%
Accrued expenses & SG&A 12%
Other current liabilities % sales 1%

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Output charts and tables


See how different inputs impact valuation. Click the "Update model" button to update the charts.

You can fine-tune your model in the browser, then export the finished product to excel to share with your team.




Enterprise value:



Total company valuation includes the value of each program plus general corporate spend (platform R&D, capex, working capital, etc).



Funding need to profitability only includes program-specific spend, and excludes general corporate spend like platform R&D and capital expenditures.



This chart shows the value of each program as it progresses through each development stage. This provides a picture of how the company's value will grow over time.

This excludes general corporate expenses.

If a program has already completed a given stage, there will be no data for that stage in the chart (for example, a Phase 2 program will not have any data for value at Preclinical development).

Click on a program in the legend to show or hide the program in the chart.



This chart shows the cumulative funding need through each development stage.

This excludes general corporate expenses.

If a program has already completed a given stage, there will be no data for that stage in the chart (for example, a Phase 2 program will not have any data for funding need through Preclinical development).

Click on a program in the legend to show or hide the program in the chart.



This chart shows the return on investment of each development stage. It shows the increase in valuation after completing a stage divided by the total cost of funding the stage.

This information can be used to plan investment and fundraising strategy. Prioritizing investments with high near-term value inflection enables you to raise funding on better terms, which can be used to fund programs with longer-term value inflection.

This excludes general corporate expenses.

If a program has already completed a given stage, there will be no data for that stage in the chart (for example, a Phase 2 program will not have any data for value inflection at Preclinical development).

Click on a program in the legend to show or hide the program in the chart.



This shows annual net revenue by program. Net revenue equals gross revenue less gross-to-net adjustments.

Click on a program in the legend to show or hide the program in the chart.



Operating income by program does not include general platform R&D or other general corporate expense.

Click on a program in the legend to show or hide the program in the chart.



Risk-adjusted net income adjusts net income by the probability of that income occurring. This accounts for the technical risk of each development stage.

Click on a program in the legend to show or hide the program in the chart.



DCF overview

$ in millions, except drug price




Methodology



This model uses a risk-adjusted NPV model to calculate valuation. This is a common technique in biotech and pharma.

The default assumptions for pre-approval costs come from two studies, Paul et al Nature Reviews Drug Discovery 2010 and DiMasi et al, Journal of Health Economics 2016. These are some of the most-cited studies of the costs of drug development.

The default model uses 50,000 as the peak number of patients treated per year. This is an arbitrary assumption. For your model, use the total number of patients that would be indicated for your product if approved.

The default assumption for time to peak sales is 5 years. Successful drugs typically reach peak sales in 5-7 years, though it can take significantly longer.

The COGS, SG&A, R&D, capex, and working capital assumptions are based on industry benchmarks, although there is a very wide range of values here.

For each year in the projection period, the model calculates NPV from the current year to the end of the projection period from the perspective of an investor or acquiror considering doing a deal with the company. The default assumption for discount rate is 10%.

The model includes a full income statement as well as select items from the balance sheet and cash flow statement that are required for the discounted cash flow analysis.



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