Research On The Income Law In The Evaluation Of Bio - Pharmaceutical Enterprises

Nowadays,with the development of R&D, biological technology, which is considered as rising industry by most countries, has paved the way for recent science achievement.Meanwhile, molecular biology and genetic engineering enhance people’s faith that science plays important role in improving living conditions.All of these phenomena raise people’s belief in prospect of the mixture--biopharmaceutics. Biopharmaceutical technology performs effectively in conquering stubborn diseases like AIDS,cancer and so on.But which can not be neglected are the uncertainties and risks caused by difficulties of research and development,informality of operations,limits of laws and regulations.In this condition,valuing the biopharmaceutical companies properly matters in terms of mergers and acquisition,risk control and permanent development.What’s more,market value is easily affected by sales volume,competitiveness factors,which play important role in valuation properly.In comparison with traditional drug companies, biopharmaceutical companies’ characteristics can be summarized as:risky,changeable,hard to estimate sales volume;transnational-operated,complex operational conditions,based on good international operational abilities,most of which are also characteristics of high-tech companies.This thesis aims at valuing biopharmaceutical companies by income method,choosing listed biopharmaceutical companies and American leading force Pfizer as example to executive case research.This thesis is explained in theoretical and numerical ways.First of all,some survey is made to introduce the industry,characteristics and leading factors.Then,systematical introduction is conducted to compare 3 specific methods of income methods and chooses Discounted Free Cash Flow method(FCFF) as main method.After financial analysis and valuation are conducted,we acquire enterprise value of Pfizer by December,2015 and verify the result with the market value of stock market.Finally, variance analysis of Chinese and American biopharmaceutical companies are performed to later draw lessons from experience for Chinese biopharmaceutical companies.