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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: nigel bates who wrote (2065)	11/20/2000 4:41:09 PM
From: Icebrg	Respond to of 52153

Yes, valuation is difficult and interesting. In Sweden you may actually put your research expenses in the Balance Sheet. Although most companies don't like to do it. On the other hand if you buy another company a lot of the costs for previous development expenses (of various types) will end up on the purchasing companies B/S. Although it is called goodwill. Goodwill is difficult to motivate but also difficult to do without. Finally, for development stage biotech companies one can in many cases get an idea about the size of the cost for previous efforts. Just look at the accumulated deficits.

To: nigel bates who wrote (2065)	11/20/2000 7:06:39 PM
From: tom pope	Read Replies (1) \| Respond to of 52153

>>By all means report R&D expenditure as a separate item, but remember that it's still expenditure<< And building a lab or equipping that lab is "still expenditure". Do you think the cost of building the lab should be expensed rather than capitalized? The amounts expended on R&D create an asset called intellectual property. If the IP turns out to be valueless, it should be written off, just as the capitalized cost of building the lab should be written off when it no longer is of economic benefit to the firm.