[lotsofpulp]

> Sometimes its so obvious that a drug will work and there’s so much competition that they acquire them early like Sofosbuvir for $11 billion, years before its approved.

Then why doesn’t someone else pay $12B?

Clearly there is a limit, and it must be related to risk. The risk of the drug failing to sell at the price you hope it will sell in the quantities you need it to sell to earn the desired ROI.

[throwup238]

The value is easily calculated by taking the potential number of patients times how much their insurance will pay, which is itself easy to calculate based on historical information and quality of life improvements. Adjust for risk based on the stage of development etc.

This is all really really basic stuff. Please just google the rest yourself: https://www.baybridgebio.com/drug_valuation.html