Ilyukhin E.V.PhD in Biology, Associate Professor of Department of Economics, Management and Informatics, Institute of Aviation Technology and Management (Ulyanovsk State Technical University). evgeny.ilyukhin@gmail.com
The article discusses the use of various types of fiscal multipliers to estimate the value of the biopharmaceutical companies' shares publicly traded in the USA. The author points out that it is quite challenging because the pharmaceutical companies are characterized by the income volatility that is related to cost, time and uncertainty of the research process. The paper emphasizes that the received results indicate the limited use of various financial multipliers in estimation of the bio-pharmaceutical companies' value. Moreover, the work makes the following meaningful observations: (1) the multiple valuation method does not explain the market value of biopharmaceutical firms with reasonable accuracy; (2) the equity value multiples are less appropriate for the valuation of biopharmaceutical firms than the entity value ones in except of more stable value drivers: sales and book value; (3) the traditional valuation multiples outperform the knowledge-related ones which can be used as an addition only; (4) the research intensity ratio can be employed for the valuation of biopharmaceutical firms because of its more accurate estimates compared to knowledge-related multiples; (5) ranks of enterprise value measure can be used for the selection of comparable firms of the studied sector.
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