Life sciences valuations

The Life Sciences industry is facing new challenges and opportunities. Pre-commercial Life Sciences companies have unprecedented access to the capital that is required to successfully execute their development strategies.  As a result, organizations are challenged with a host of financial reporting and regulatory requirements.  In addition, the race for vaccines and a shift from blockbuster drugs to biosimilars and specialty pharmaceuticals is impacting research and development costs, clinical trials, and the approval cycle. Industry convergence, mergers, and acquisitions are altering the value chain and creating new opportunities. 

The KPMG Life Sciences Valuation & Business Modeling Services practice provides the knowledge and experience necessary to meet the unique valuation issues facing this industry.  KPMG serves Life Sciences organizations in the following ways: 

• Valuing multi class stock compensation plans to comply with US GAAP requirements under ASC 718 and IRC 409A
• Performing legal entity valuations for tax reporting requirements
• Assisting clients with their annual fair value disclosure requirements including goodwill impairment under ASC 350, purchase price allocations under ASC 805 and other financial reporting requirements 
• Estimating the standalone selling price of performance obligations associated with licensing arrangements for revenue recognition compliance requirements under ASC 606
• Performing valuation and pricing analyses to estimate the fair value of organizations clinical and pre-clinical programs to assist organizations with identifying pricing opportunities, estimating pricing strategies that may result in better returns, enhance ROI and profit margins, and potential investments or transactions
• Establishing and complying with regulatory Fair Market Value (FMV) requirements associated with third party arrangements such as distribution agreements, GPO agreements and other fee-for-service arrangements

The Valuation & Business Modeling Services practice operates in all major markets in the United States and has access to a global network of other KPMG International member firms in over 50 countries. Our professionals have extensive knowledge in the Life Sciences industry allowing for a better understanding of issues, drivers, leading practices and trends that are shaping the industry.