Risk Adjusted Net Present Value: What is the current valuation of Pfizer’s PF-06480605

The revenue for PF-06480605 is expected to reach an annual total of $8 mn by 2038 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.

PF-06480605 Overview

RVT-3101 is under development for the treatment of Crohn’s disease and ulcerative colitis. The drug candidate is a fully human immunoglobulin G1 monoclonal antibody, which is administered intravenously and subcutaneously. The drug candidate acts by targeting TNFSF15. It is a new molecular entity.

Pfizer Overview

Pfizer discovers, develops, manufactures, and commercializes biopharmaceuticals. The company offers products to treat various conditions such as cardiovascular, metabolic and pain, women’s health, cancer, inflammation, immune disorders, and rare diseases. It also provides sterile injectable pharmaceuticals, biosimilars, active pharmaceutical ingredients (APIs) and contract manufacturing services. Pfizer sells its products through wholesalers, retailers, hospitals, individual provider offices, clinics, government agencies and pharmacies. It has major manufacturing facilities in India, China, Japan, Ireland, Italy, Belgium, Germany, Singapore, and the US. The company provides its products in North America, South America, Asia-Pacific, Australia, Europe, Africa, and the Middle East. Pfizer is headquartered in New York, the US.

The company reported revenues of (US Dollars) US$100,330 million for the fiscal year ended December 2022 (FY2022), an increase of 23.4% over FY2021. In FY2022, the company’s operating margin was 36.4%, compared to an operating margin of 29.1% in FY2021. In FY2022, the company recorded a net margin of 31.3%, compared to a net margin of 27% in FY2021. The company reported revenues of US$18,282 million for the second quarter ended April 2023, a decrease of 24.7% over the previous quarter.

For a complete picture of PF-06480605’s valuation, buy the drug’s risk-adjusted NPV model (rNPV) here.

GlobalData

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.