ExamplePhase 2 lung cancer ADC
What Else Was Checked
Basis of Valuation
How the Price Builder Works
- Prices. Upfront payments in US$ millions at signing. About half of license deals disclose an upfront, and those that do tend to be larger. Some upfronts include an equity purchase.
- Similar licenses. The ten closest worldwide licenses for the same kind of drug (new or repurposed; one asset, or several or a platform) and the same kind of licensee, signed since 2018, at the same phase or a neighbouring one, in the same therapeutic area (all areas when there are too few). They are ranked by indication (licenses led by the asset's indication first, then those that list it, then related or other named indications), then phase, target and type of drug, then date. For distinct technologies (ADCs, bispecific antibodies, gene and cell therapies, RNA medicines, radiopharmaceuticals, vaccines), licenses of the same technology rank first, from other areas when the asset's area has too few. Research collaborations, licenses with shared costs or profits, options and royalty deals are left out. Any comparable can be removed and other deals added.
- Rights. U.S.-only rights are valued at the typical ratio of U.S.-only to worldwide upfronts in past deals. Licenses for Europe, Japan or China alone are not used.
- Today's price level. The comparables are moved halfway toward the price level of the past 12 months; moving them all the way overshot in back-testing.
- Adjustments. Each is how far licenses with that feature priced from otherwise similar licenses signed since 2019, measured against the similar licenses themselves, so a feature most of them share changes little. A feature is used only where its effect held in both 2019–22 and 2023 onward, and only if it moves the price by about 2% or more. Comparables at a neighbouring phase are restated by the typical gap in upfronts between the two phases. In oncology, an asset in three or more indications is priced above narrower similar licenses; narrower assets are never marked down.
- Common sense. A better answer never lowers the value.
- Modality. Asked specifically. For distinct technologies it also picks the similar licenses. Adjustments use its broad group (small molecules; antibodies, including bispecifics and ADCs; gene, cell and oligonucleotide medicines; other), because adjusting for each modality separately was less accurate.
- Efficacy data in patients. Applied to antibody and oncology licenses at Phase 1 or 2, where its effect held in both periods.
- Priority review voucher. About $180M times the share of drugs at this phase that reach approval; the seller gets it only if the license terms include it.
- China origin. China-origin deals are included like any other; the tool never asks about or adjusts for origin.