The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach
The value of investments in high growth start-up firms is difficult to assess because payments are far in the future and their arrival is uncertain. Some of these firms may seem overvalued according to traditional methods, such as the Net Present Value, which fails to account for three drivers of va...
- Autores:
-
Cecilia Maya Ochoa
- Tipo de recurso:
- Fecha de publicación:
- 2019
- Institución:
- Universidad EAFIT
- Repositorio:
- Repositorio EAFIT
- Idioma:
- eng
- OAI Identifier:
- oai:repository.eafit.edu.co:10784/14061
- Acceso en línea:
- http://hdl.handle.net/10784/14061
- Palabra clave:
- Valuation
Real Options
Biotechnology
Creative Destruction
Jump-only Stochastic Process.
Valoración
opciones reales
biotecnología
destrucción creativa
procesos estocásticos de salto
- Rights
- License
- Copyright © 2006 Cecilia Maya Ochoa
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The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| title |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| spellingShingle |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach Valuation Real Options Biotechnology Creative Destruction Jump-only Stochastic Process. Valoración opciones reales biotecnología destrucción creativa procesos estocásticos de salto |
| title_short |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| title_full |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| title_fullStr |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| title_full_unstemmed |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| title_sort |
The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approach |
| dc.creator.fl_str_mv |
Cecilia Maya Ochoa |
| dc.contributor.author.spa.fl_str_mv |
Cecilia Maya Ochoa |
| dc.contributor.affiliation.spa.fl_str_mv |
Universidad EAFIT |
| dc.subject.keyword.eng.fl_str_mv |
Valuation Real Options Biotechnology Creative Destruction Jump-only Stochastic Process. |
| topic |
Valuation Real Options Biotechnology Creative Destruction Jump-only Stochastic Process. Valoración opciones reales biotecnología destrucción creativa procesos estocásticos de salto |
| dc.subject.keyword.spa.fl_str_mv |
Valoración opciones reales biotecnología destrucción creativa procesos estocásticos de salto |
| description |
The value of investments in high growth start-up firms is difficult to assess because payments are far in the future and their arrival is uncertain. Some of these firms may seem overvalued according to traditional methods, such as the Net Present Value, which fails to account for three drivers of value for highly innovative industries: intellectual capital as the engine of innovation, market power as the expectation of monopolistic power when innovating, and a growth option which may be exercised in the case of success. This paper presents a case study on a biotechnology start-up and applies the Creative Destruction – Real Options approach (CD-ROA) (Maya, 2004) which takes into account all three drivers of value and is able to explain the high prices investors pay for shares of a company in this industry. It proves that such prices are not cases of overpricing but of recognition of the large growth potential of firms which are part of highly innovative industries. |
| publishDate |
2019 |
| dc.date.issued.none.fl_str_mv |
01/12/2006 |
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2019-10-04T14:40:25Z |
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2019-10-04T14:40:25Z |
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01/12/2006 |
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article info:eu-repo/semantics/article publishedVersion info:eu-repo/semantics/publishedVersion |
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Artículo |
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publishedVersion |
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2256-4322 1692-0279 |
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http://hdl.handle.net/10784/14061 |
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2256-4322 1692-0279 |
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http://hdl.handle.net/10784/14061 |
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eng |
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eng |
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http://publicaciones.eafit.edu.co/index.php/administer/article/view/633 |
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http://publicaciones.eafit.edu.co/index.php/administer/article/view/633 |
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Copyright © 2006 Cecilia Maya Ochoa |
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http://purl.org/coar/access_right/c_abf2 |
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Acceso abierto |
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Copyright © 2006 Cecilia Maya Ochoa Acceso abierto http://purl.org/coar/access_right/c_abf2 |
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text/html |
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Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees |
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Universidad EAFIT |
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instname:Universidad EAFIT reponame:Repositorio Institucional Universidad EAFIT |
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AD-minister: No 09 (2006) |
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Medellín de: Lat: 06 15 00 N degrees minutes Lat: 6.2500 decimal degrees Long: 075 36 00 W degrees minutes Long: -75.6000 decimal degrees01/12/20062019-10-04T14:40:25Z01/12/20062019-10-04T14:40:25Z2256-43221692-0279http://hdl.handle.net/10784/14061The value of investments in high growth start-up firms is difficult to assess because payments are far in the future and their arrival is uncertain. Some of these firms may seem overvalued according to traditional methods, such as the Net Present Value, which fails to account for three drivers of value for highly innovative industries: intellectual capital as the engine of innovation, market power as the expectation of monopolistic power when innovating, and a growth option which may be exercised in the case of success. This paper presents a case study on a biotechnology start-up and applies the Creative Destruction – Real Options approach (CD-ROA) (Maya, 2004) which takes into account all three drivers of value and is able to explain the high prices investors pay for shares of a company in this industry. It proves that such prices are not cases of overpricing but of recognition of the large growth potential of firms which are part of highly innovative industries.La valoración de la inversión en compañías nacientes de alto crecimiento no es tarea fácil, pues los ingresos esperados se generan en un futuro lejano y bajo gran incertidumbre. De acuerdo con métodos tradicionales de valoración como el Valor Presente Neto, el mercado parece sobrevalorar algunas de estas compañías. Ello se debe a que estos métodos tradicionales no tienen en cuenta tres elementos esenciales que determinan el valor en estos casos: el capital intelectual como el motor de la innovación, el poder de mercado por la expectativa de ingresos monopolísticos si se da la innovación y una opción real de crecimiento que puede ser ejercida en caso de éxito. Este artículo aplica a una empresa de biotecnología el enfoque de opciones reales y destrucción creativa (Maya, 2004), el cual incluye estos tres determinantes del valor y logra explicar el alto precio que los inversionistas pagan por una acción de este tipo de empresas. Se demuestra que éste no es un caso de sobrevaloración sino de reconocimiento del alto potencial de crecimiento de empresas que se encuentran en sectores altamente innovativos.text/htmlengUniversidad EAFIThttp://publicaciones.eafit.edu.co/index.php/administer/article/view/633http://publicaciones.eafit.edu.co/index.php/administer/article/view/633Copyright © 2006 Cecilia Maya OchoaAcceso abiertohttp://purl.org/coar/access_right/c_abf2instname:Universidad EAFITreponame:Repositorio Institucional Universidad EAFITAD-minister: No 09 (2006)The Value of a Biotechnology Start-up: Creative Destruction and Real Options Approacharticleinfo:eu-repo/semantics/articlepublishedVersioninfo:eu-repo/semantics/publishedVersionArtículohttp://purl.org/coar/version/c_970fb48d4fbd8a85http://purl.org/coar/resource_type/c_6501http://purl.org/coar/resource_type/c_2df8fbb1ValuationReal OptionsBiotechnologyCreative DestructionJump-only Stochastic Process.Valoraciónopciones realesbiotecnologíadestrucción creativaprocesos estocásticos de saltoCecilia Maya OchoaUniversidad EAFITAD-minister9937THUMBNAILminiatura-administer.jpgminiatura-administer.jpgimage/jpeg8755https://repository.eafit.edu.co/bitstreams/462c3e6e-b5ef-465c-a602-d76640092d38/download87c28d32b620f3408b1c70a3c505fbd8MD51ORIGINALThe Value of a Biotechnology Start-up Creative Destruction and Real Options Approach.pdfThe Value of a Biotechnology Start-up Creative Destruction and Real Options Approach.pdfTexto completo PDFapplication/pdf1419127https://repository.eafit.edu.co/bitstreams/4f5cb298-b6a3-45b4-8cfa-ef22abee9352/download79869825bf2a8aca9ca138c839e6887bMD52articulo.htmlarticulo.htmlTexto completo HTMLtext/html373https://repository.eafit.edu.co/bitstreams/c989f353-ecdb-46b6-8e70-7ddde48ae9fd/download0cd485042c779333ec2678ea70ffe135MD5310784/14061oai:repository.eafit.edu.co:10784/140612019-11-28 10:16:07.473open.accesshttps://repository.eafit.edu.coRepositorio Institucional Universidad EAFITrepositorio@eafit.edu.co |