Biotech : Investir ou Fuir ? Ou pourquoi les analystes financiers sont toujours de mauvais conseil pour valoriser une biotech

Details

Supervisors

Nsabimana, André

Faculty

Louvain School of Management

Degree label

Master [60] en sciences de gestion (horaire décalé)

Abstract

Reading financial valuation of biotech companies is always exciting since are displayed potentials and targets as high as +100%, +200%, +300%. However, the example of companies listed on Euronext Brussels shows that in the majority of the cases they never reached these targets and their share valuation has actually decreased since their IPO. The aim of the report is to explain this difference between expectations and the reality. First, by presenting the characteristics of biotech companies, drug development cycle and continuing need in fundings. Then, by describing several valuation models, their use and adjustments to the biotech sector. These two points will shed the light on the Risk / Reward ratio needed to define the investment interest and each parameter will be examined, in order to establish its importance and precision within the biotech sector. Complementary valuation methods will also be presented and practical examples will be used as support all along this report.