I ran across a great read this afternoon re: valuing biotechs - many of the issues encountered by us resverlogix shareholders are typical to the industry. A link to the article follows:

https://www.toptal.com/finance/valuation/biotech-valuation

Some key points from the paper re: the drug development process - 

Many biotech firms do not yet have revenues

Structured development process. A typical timeframe for a new drug from submission of the Investigational New Drug (IND in the US) to market entry, post regulatory approval, is around eight years. During those eight years, the process follows structured phases of research, testing, and FDA review, during any of which the drug can fail.

A drug is either effective or not. Prior to approval, drugs go through a structured process (pre-clinical and clinical trials), at any point during which they can fail—and once they fail, the process is often irreversible. That represents a different risk profile from most other businesses, where the outcome distribution is less binary. Consequently, we need to reflect this different risk profile, such as when creating a discounted cash flow (DCF) and choosing the appropriate discount rate.

The article concludes with these parting words from the author - 

"I hope that while the scientific work is the most important value driver of a biotech company, there is room for savvy financial experts to add value, such as tasks like conceiving and negotiating partnerships that increase risk-adjusted returns and hence value to all sides. As prominent biotech investor Stephen Diggle noted in a recent Bloomberg article: “Bringing financial expertise to fledgling biotech companies helps create value because management consists mostly of scientists who focus on research and development.” Of course, if the financial expert has some domain expertise and is passionate about the science, all the better!"

Interesting.

Hopefully RVX is developing those partnerships that add value.

With a Break Thru Therapy Designation having been awarded to Resverlogix after the betonmace trial failure it seems to me that there IS value here sans revenue.

Enjoy the read

Chicagoest