In the final installment of our Regenerative Medicine panel, Kineticos’ Chief Commercial Officer, Kevin Hampton, sparks a discussion surrounding how Regenerative Medicine companies are valued.
- Susan Nichols – CEO, Falcon Therapeutics
- Flagg Flanagan – CEO & Chairman, DiscGenics
- Bob Hutchens – CEO, StemBioSys
KH: We’ve seen some very large M&A transactions in terms of valuations. How are Regenerative Medicine companies thinking about valuations? How do you value a company that is working on something that others haven’t?
Bob: At the end of the day, valuations in this space are more of an art than science. You look at where the drug is in the development cycle, the size of the market, and so on. You also want to look at the management team and the team that’s driving the company’s strategy. All of those factors drive the valuation.
Susan: We look at Falcon Therapeutics, our organization, and have many conversations on our value. We can monitor activity in the sector, receive feedback from investment bankers, and still the valuation is a conversation between the investor and the company on current value and future performance. We are in the process of filing our pre-IND, which is one of our trigger points for a change in valuation because it is our first meaningful FDA engagement. Generally speaking, it has been very interesting as valuations are all over the place. Having the potential to treat multiple diseases with a single product is one value driver for us. Another is a clear manufacturing pathway and platform that is consistent and scalable. All factors are being weighed into our valuation.
Flagg: I really do believe the agency is trying to help us be successful in delivering potentially life-changing products to patients. Susan’s company is the perfect example of a combination of her experience and the FDA’s willingness to ensure these products accelerate at a better pace.
When it comes to valuation in the regenerative medicine space, I agree with what others have said about the experience of the management team, potential market size, pipeline, and drug development pathway all playing critical roles. However, one question that comes up frequently when determining the value of a company in our space is directly related to the potential impact our products and therapies can have on humanity. What we in the regenerative medicine field are attempting to do, providing a curative solution to many maladies that currently have only palliative care options, is time and resource intensive. Money becomes a resource to develop better ways to help people in the end. It’s the only way we’re going to solve problems that will help us evolve.
KH: What you said, Flagg, completely resonates with me. We have a shared purpose with all of our sponsors: to improve patient outcomes. The only way we, or any life sciences organization, can help with that mission is to stay in business. Thank you all for participating in this panel session and Kineticos will certainly be keeping an eye on each of your organizations as you progress through the clinic. Best of luck!
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