Valuation of Medical Inventions (MED-VEST) project

Background

The Valuation of Medical Inventions (MED-VEST) project is the second phase of the Valuation of Early-Stage Technology Project (VEST) project. With a focus on pharmaceutical products and medical devices, the MED-VEST project aims to develop both theoretical and empirical valuation models of early-stage technology and start-ups in the medical technology industry.

Valuation is essential to pharmaceutical and medical device companies at various stages: fundraising, technology transfer, mergers and acquisitions (M&A), and initial public offerings. In the recent decades, the expansion of healthcare market and the lack of in-house late-stage products in large companies have put raising demand on the valuation associated with investment, licensing, and M&A activities. However, despite the growing need for valuation, applying appropriate valuations, especially to the early-stage technology and start-ups, is still challenging in the medical technology industry due to its distinct technical risks, regulatory framework, and market uncertainties.

The aim of the project

Reviewing previous valuation studies, we find a discrepancy between industrial needs and academic interests. Innovators concern how much the invention is worth; whereas, economic models seldom predict the monetary value of inventions. Based on the advantages and drawbacks of current valuation methods, the MED-VEST project aims to develop new valuation models of medical inventions and start-ups, through which, it should be clear how the monetary value of inventions or companies is associated with various factors such as technology characteristics, innovator characteristics, and market opportunities.

The valuation framework of pharmaceutical products and medical devices will be built separately. The empirical study of this project will employ micro-level data on patents, product development, and companies. 

Funding source, people, and timeframe

The MED-VEST project is supported by the Chinese Academy of Medical Sciences (CAMS) Oxford Institute (COI).

Professor Xiaolan Fu, the founding director of the TMCD, leads the project; Dr Rong Dai is the Research Officer of this project.

Launched in 2020, this project is supposed to be closed by the end of 2021.