Research On The Value Evaluation Of Unprofitable Innovative Drug Enterprises On The Science And Technology Innovation Board

Accurate value assessment is not only a practical need for long-term stable development of enterprises,but also can provide investors with a reliable and objective basis for investment decisions.In 2018,China piloted the registration system,formally established the Science and Technology Innovation Board and introduced multiple sets of listing criteria,including allowing eligible unprofitable innovative drug companies to be listed.This criterion has increased the enthusiasm of unprofitable innovative drug companies to run to the STB for listing,and has bred the capital market’s interest in unprofitable innovative drug companies.However,due to the characteristics of high R&D investment,unprofitability and future uncertainty,traditional valuation methods are unable to accurately assess the value of such enterprises,thus making it more difficult for investors to invest and increasing investment risks to a certain extent.Therefore,how to more accurately assess the value of unprofitable innovative pharmaceutical enterprises on KCI and construct a value assessment method suitable for unprofitable KCI is more urgent to protect investors’ interests.From the theoretical and practical viewpoints,there are few case studies on the value assessment of unprofitable innovative pharmaceutical enterprises on the KCI board.Based on the above background,this article analyzes and finds that such enterprises have characteristics of high R&D investment,high growth and high Kor risk,and compares and analyzes the limitations of traditional cost,market and income approaches,and attempts to introduce a valuation method for unprofitable innovative pharmaceutical enterprises.In this paper,we use a combination of normative and case study approaches to study the selected cases.First,the background,significance and content of the study are explained,and the literature on value assessment methods at home and abroad is reviewed to draw inspiration from the academic research results.Next,the concepts of unprofitable enterprises,innovative drugs and the listing rules of the KCI Board are explained,and the theories and value assessment methods related to value assessment are analyzed.Then,the innovative design of the STB system and the characteristics of innovative drug companies on STB,such as high R&D investment,high uncertainty and unprofitability,are further analyzed and elaborated.The limitations of traditional valuation methods and the applicability of introducing EVA and Black-Scholes real option pricing models are analyzed in the light of the characteristics and valuation difficulties of such enterprises.Finally,a specific analysis is conducted in the context of the M case company to verify the reasonableness of the valuation model invoked in terms of the company’s core competencies,financial profile,and not yet profitable profile.The comparison reveals that such enterprises have strong R&D capabilities,but the valuation is low compared to the market value and requires rational investment;both models introduced are applicable to such enterprises.This study has some reference significance to the valuation challenges faced by unprofitable innovative drug companies on the KCI.