Normally, we write about existing courses and their shortcomings on these pages.

BUT… in this case, there aren’t that many Biotech Valuation courses on the market.

It’s a fairly niche area, and there isn’t exactly overwhelming interest in the topic (vs. a standard Interview Guide, let’s say).

That said, there are a few courses out there, and unsurprisingly, they have several key problems:

PROBLEM #1: Fake Companies or Generic Examples – Some training uses fictitious companies and examples, which is not at all helpful when you are interviewing for roles in biotech equity research or healthcare investment banking in real life. If a modeling exercise does not reference a real company’s investor presentations or filings, it’s less of an “exercise” and more of a “casual stroll down the street while doom-scrolling on your phone.”

PROBLEM #2: No Coverage of “Platform Companies” – Yes, it’s important to understand the valuation of pre-revenue biotech firms, including the Sum-of-the-Parts DCF, but it’s equally important to understand companies that already generate revenue with several products. We call these “platform companies” and cover them in a separate case study.

PROBLEM #3: No Real-Life Usage Examples – Finally, a lot of the existing training simply presents a valuation and… stops there. But if you want to master these skills, you must understand how to use them in real life – to make investment decisions, recommend stocks, and advise clients.

The correct approach – the one our course uses – fixes all these issues by walking you through progressively more complex case studies based on real companies.

We start with a simple pre-revenue company that a life sciences VC firm might invest in, progress to a pre-revenue public company with multiple products, and conclude with a public “platform company” that already has sales.

These case studies focus on the most important points in biotech valuation:

1) Market and Product Research – If you don’t know a drug’s market size, the number of potential patients, or the likely pricing, good luck saying anything about the valuation.

2) Financial Projections – To value any type of biotech firm, you must be able to make reasonable long-term forecasts for its drug sales, profits, and reinvestment needs over several decades – and you must reflect different scenarios around expiration dates, competition, and pricing.

3) Real-Life Usage – Each case study here concludes with case questions and answers about the company or “the full documents” in the last case study – an investment banking pitch book, equity research report, and hedge fund stock pitch.

No other course puts together all the pieces quite like this because they focus on simplified examples or theory that does not necessarily match up with real life.

You could finish everything in the course by following the training sequentially – but if you’re pressed for time, we also offer 5- and 10-hour study plans that focus on the most important points.

Think of it as a “Choose your own adventure,” with the grand prize being a job offer in biotech equity research, a biotech hedge fund, or a healthcare investment banking group (or, even better, a successful biotech investment that goes up 10x after you invest).

Through the 3 case studies in the course, you’ll learn to:

• Analyze a biotech company’s drugs, market, and potential pricing to create revenue forecasts.
• Build expense and cash flow forecasts based on market data, historical financials, and comparable companies.
• Probability-adjust the cash flow forecasts based on the chances of a drug passing clinical trials.
• Sensitize the valuation output based on factors such as the success probability, generics entry year, operating margins, and peak market share.
• Model a pre-revenue biotech startup with multiple drugs in different phases of clinical trials, including support for varied probability adjustments.
• Find data supporting the pricing, market, and margin assumptions based on comparable public companies with similar drugs.
• Value pre-revenue biotech firms using a Sum-of-the-Parts (SOTP) Valuation.
• Understand how to apply public comps and precedent transactions for biotech firms, including multiples such as Enterprise Value / Peak Sales.
• Build a full-fledged DCF, comparable company, and precedent transaction model for a “platform biotech” company that already generates revenue.
• Include more advanced valuation features, such as the mid-year convention, stub periods, a normalized Terminal Year, and robust treatment of Convertible Bonds.
• Make investment recommendations for biotech firms of all stages based on qualitative and quantitative factors.
• Write a formal stock pitch, equity research report, and investment banking pitch book for a platform biotech firm (Jazz Pharmaceuticals).

If you want to answer interview questions and case studies with ease and leap up the ladder once you start working, this is the course for you.

Brian DeChesare
Founder, Breaking Into Wall Street