The Research Of Applications Of Real Options To The Development Of New Drugs

With the economical development, the research and development investment project characteristed by the technological innovation has been became the focus of competition in various industries, especially in medicine industry highly crowded by capital, technical and knowledge . It is necessary not only massive capital but also reasonable assessment method to accelerate development of new drugs . At the same time ,we lag to other countries attributing to unreasonable assessment method in new drugs.For reasons mentioned above, this paper analyses that the Binnomial Option Pricing Model is more reasonable than NPV in tackle with the uncertainty and multi-stages in the course of the research and development of new drugs . In the paper ,we take the real options theory as the foundation , take use of BOPM and introduce the project of The Liposome of Amphotericin B to achieve the combination of qualitative analysis and the quantitative analysis, theory and practice. The paper first points out the shortcomings of NPV method and puts forward ,which is compared with the real options method based on the binary tree both can overcomes the defects of NPV method and can avoids other real options method's complexity and the opacity energy;the paper explores the possibility which introduces the real options theory to the research and development project of new drugs and elaborates the project souls match with thought of the real options; the paper starts to design the utilization frame of the real options, including distinguish of the real options types in projects and selection of the appropriate Binnomial Option Pricing method. Afterward , the paper introduce the project of The Liposome Of Amphotericin B to further testify which the project is denied for using NPV method, but it is carried out for using the more reasonable real options method; the paper forecasts the secular tendency of this company share price from the real options value quantity distributed. And real options as a new concept, which puts a new ideas for the development of China's pharmarceutical industry.