Research On Real Options Model In The Assessment Of The Value Of Bio-pharmaceutical Enterprises

With the acceleration of China’s aging population,the rapid development of the national economy and the gradual improvement of the national medical and health system,the Chinese people’s demand for bio-pharmaceutical products is expanding.China’s bio-pharmaceutical industry is gradually rising with the support of relevant state policies,and has gradually narrowed the gap with developed countries abroad.It can be predicted that China’s pharmaceutical industry will enter a period of rapid development,and the correct evaluation of the value of pharmaceutical enterprises can better protect and cultivate the industry.However,traditional methods of evaluation cannot measure the value of projects that are still being developed by bio-pharmaceutical companies,which can lead to low overall enterprise valuation.While the real options approach is a more accurate measure of the real value of a bio-pharmaceutical company by taking into account both the uncertainty of project returns and the investment opportunities encountered during the company’s development.Firstly,this thesis combs through the domestic and foreign research on enterprise value evaluation and real option theory,expound the characteristics and value composition of biomedicine enterprises,and lay the foundation for the evaluation of biomedicine enterprises.Secondly,Anke biological company is selected as a case study.This thesis divides the whole value of Anke biological company into two parts.One is the value of the existing assets,that is the value of the products that Anke biological company has already put into the market.The other part is the potential project value,that is the value of potential profitable projects that Anke biological company is currently developing but has not yet generated revenue.Combined with Anke biological company’s operating conditions and main financial indicators,through the appropriate financial forecast,calculate the free cash flow discount model required specific parameters,calculate the value of the existing assets of Anke biological company.The value of the potential project is divided into two parts.One part is the value of the expansion and upgrading project of the recombinant human growth hormone production line.The cash flow generated after the completion of the production line can be discounted to obtain its value.The other part is the new drugs which are still in the process of research and development,the research and development process of new drugs can be regarded as the process of whether the call option can be exercised.In this paper,the value of the call option can be calculated by the B-S model.Finally,the total value of Anke biological company under the real option evaluation model is obtained,and the results are compared with the real value of Anke biological company,which proves the rationality of the evaluation results,therefore,it is concluded that the real option method can accurately reflect the value of R&D projects in Biomedical Enterprises and the conclusion is drawn that the real option method can accurately reflect the value of R&D projects in Biomedical Enterprises.