When thinking about valuing #biotechs, especially those which are not yet profitable, a probability adjusted discounted cash flow model is perhaps the most important methodology

Though it too has drawbacks

#DCF #PoS #learnbiotechinvesting #investing #BiotechPrometheus

Here's an annotated #KaplanMeier curve to help investors know what information is being presented.

It covers #mPFS, 12 & 24-month survival, #HazardRatio, #atRisk.

These metrics give different views of a drug.

#learnbiotechinvesting #biotech #investing #BiotechPrometheus

Investors should take an unbiased view of data and not only listen to management. Ask yourself: Is the drug doing what it's supposed to do?

Look for: getting to right tissue, target engagement, proof of mechanism, and proof of concept

#learnbiotechinvesting #biotech #investing #BiotechPrometheus

Incorporating Probability of Success (PoS) is a unique aspect of #biotech valuation investors must be aware of.

It tries to factor development risk into revenue and cost assumptions.

Here is a table of PoS values:

#learnbiotechinvesting #investing #BiotechPrometheus

Investors should understand the #FDA regulatory process well. Here is a quick summary

At each step investors should ask themselves if the company is developing things in a way that will satisfy the FDA

Until a drug is approved the FDA is the most important decision maker

#BiotechPrometheus