Risk Adjusted Net Present Value: What is the current valuation of Sandoz Group’s Aflibercept Biosimilar

The revenue for Aflibercept Biosimilar is expected to reach an annual total of $146 mn by 2039 globally based off GlobalData’s Revenue 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.

Aflibercept Biosimilar Overview

Aflibercept biosimilar (SOK583A1) is under development for the treatment of wet age-related macular degeneration. It is administered through intravitreal route as solution. The drug candidate acts by targeting placenta growth factor (PGF) and vascular endothelial growth factor A.

Sandoz Group Overview

Sandoz Group develops, manufactures and distributes generics and biosimilar medical products used for the treatment of various life threatening diseases. The company is headquartered in Zug City, Zug, Switzerland.

The company reported revenues of (US Dollars) US$9,099 million for the fiscal year ended December 2022 (FY2022), a decrease of 6% over FY2021. In FY2022, the company’s operating margin was 13.6%, compared to an operating margin of 14.4% in FY2021. In FY2022, the company recorded a net margin of 9.3%, compared to a net margin of 9.4% in FY2021.

For a complete picture of Aflibercept Biosimilar’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.