Risk adjusted net present value: What is the current valuation of F. Hoffmann-La Roche’s Vixarelimab?

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Vixarelimab is a monoclonal antibody commercialized by F. Hoffmann-La Roche, with a leading Phase II program in Plaque Psoriasis (Psoriasis Vulgaris). According to Globaldata, it is involved in 5 clinical trials, of which 2 were completed, and 3 are ongoing. GlobalData uses proprietary data and analytics to provide a complete picture of Vixarelimab’s valuation in its risk-adjusted NPV model (rNPV). Buy the model here.

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The revenue for Vixarelimab is expected to reach an annual total of $86 mn by 2039 in the US based off GlobalData’s Expiry Model. The drug’s revenue forecasts along with estimated costs are used to measure the value of an investment opportunity in that drug, otherwise known as net present value (NPV). Applying the drug’s phase transition success rate to remaining R&D costs and likelihood of approval (LoA) to sales related costs provides a risk-adjusted NPV model (rNPV). The rNPV model is a more conservative valuation measure that accounts for the risk of a drug in clinical development failing to progress.

Vixarelimab Overview

Vixarelimab (KPL-716) is under development for the treatment of pruritus, prurigo nodularis, chronic urticaria or hives, plaque psoriasis (psoriasis vulgaris), lichen simplex chronicus (neurodermatitis), erosive oral lichen planus, atopic dermatitis, idiopathic pulmonary fibrosis, interstitial lung disease, ulcerative colitis and fibrosis. It is a fully human monoclonal antibody targeting single epitope. The drug candidate is administered intravenously and subcutaneously. It acts by targeting oncostatin M receptor beta.

F. Hoffmann-La Roche Overview

F. Hoffmann-La Roche (Roche) is a biotechnology company that develops drugs and diagnostics to treat major diseases. It provides medicines for the treatment of cancer, other auto-immune diseases, central nervous system disorders, ophthalmological disorders, infectious diseases, and respiratory diseases. The company also offers in vitro diagnostics, tissue-based cancer diagnostics, and diabetes management solutions. Roche conducts research to identify novel methods to prevent, diagnose, and treat diseases. The company offers its products and services to hospitals, healthcare professionals, commercial laboratories, researchers, and pharmacists. Together with its subsidiaries and partners, the company has operations in various countries. Roche is headquartered in Basel, Switzerland.

For a complete picture of Vixarelimab’s valuation, buy the drug’s risk-adjusted NPV model (rNPV) here.

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GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.

To create this model, GlobalData takes into account factors including patent law, known and projected regulatory approval processes, cash flows, drug margins and company expenses. Combining these data points with GlobalData’s world class analysis creates high value models that companies can use to help in evaluation processes for each drug or company.

The rNPV method integrates the probability of a drug reaching a clinical stage into the cash flow at that time, which provides a more accurate valuation, as it considers the probability that the drug never makes it through the clinical pathway to commercialization. GlobalData’s rNPV model uses proprietary likelihood of approval (LoA) and phase transition success rate (PTSR) data for the indication in the highest development stage, which can be found on GlobalData’s Pharmaceutical Intelligence Center.

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