By Jeff Williamson THE SITUATION: A healthcare company with a portfolio of products in development for treating cardiac conditions was fielding investor interest for a potential acquisition. The company wanted to weigh the relative merits of raising additional equity financing versus exploring multiple M&A offers, as these initial discussions indicated a price range that did
By Jeff Suchocki, CFA The Situation: Adoption of ASC 842 – Lease Accounting is mandatory for all private companies for fiscal years beginning after December 15, 2021. To comply with this mandatory adoption requirement, a privately held, clinical stage biotech company needed to understand a reasonable discount rate for multiple lease agreements. The company requested
THE PROBLEM: A healthcare technology company that sells its FDA 510(k) approved device and supporting dashboarding and analytic tools to hospitals was in the midst of a capital raising effort involving a one-on-one negotiation with an existing strategic partner. The company received from the strategic partner a “low-ball” valuation. The company’s management team and board
THE PROBLEM: A publicly traded clinical stage biotech company needed to understand the correct implied discount rate for a lease agreement in accordance with ASC 842 rules. THE SOLUTION: ASC 842 has specific rules relating to leases, including guidance on lease classification (operating versus financial) and how to discount a lessee’s lease payments to arrive
Value is ultimately what parties agree to. Sometimes this seems rational, other times irrational. The reality is that value often results from the ability or inability to create an effective bidding process and to persuade/anchor a strategic counterparty toward your perspective. Negotiating leverage and personalities are just as important in deal negotiation as market potential
In finance, theories about the efficiency of markets have been both extraordinarily elegant and disastrously wrong on many occasions. These so-called efficient markets concepts have brought about interesting tools like the Capital Asset Pricing Model and Black-Scholes or Cox-Ross-Rubinstein binomial lattice models as tools for understanding how to assess a company’s cost of capital or
THE PROBLEM: A development stage biotechnology company (considering an IPO in the near future) entered into a series of financings which required the valuation of components of the financings deemed to be a derivative for financial reporting purposes. THE SOLUTION: RNA worked with the company and their Big 4 auditor to develop a Monte Carlo
THE PROBLEM: Publicly traded late-stage therapeutics company negotiates with, and enters into, collaboration / license arrangement with a big pharma partner. THE SOLUTION: Forecasting, market research, modeling and transaction support combined with resultant collaboration agreement accounting analyses. “You were a great support for us, responsive and knowledgeable. Thank you!” CFO “You are my top go
THE PROBLEM: Determine the fair market value of a spin-out of an existing successful healthcare technology company for purposes of tax and transaction planning purposes. THE SOLUTION: Financial modeling and diligence, transaction support and fair market value opinion. “You are our go to team for valuation support. You know your domain and are responsive.” –
THE PROBLEM: Two of the largest pension funds in the world required an independent valuation assessment of the portfolio of a multi-billion dollar life science/ healthcare private equity fund. THE SOLUTION: Robust research, forecasting, modeling, comp analysis and valuation analytics to determine reasonableness of value indications. “We love working with you. You actually know what
