Real Options Analysis (ROA)opens innovation: the biopharmaceutical case

A real options based model to select a balanced R&D portfolio

The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting a balanced R&D portfolio from a set of candidate drugs. The model has been tested through a case study.

I Velivoli che hanno Influenzato il Mercato Aeronautico Commerciale

Lo studio mira a identificare quali aeromobili hanno più inciso sul trasporto commerciale mondiale dal dopoguerra ad oggi. L’indicatore scelto per fare questa analisi è stato il Revenue Passenger Kilometers, che ognuno di questi modelli ha realizzato dalla sua entrata in servizio sino alla fine del 2003. Per ottenere questo risultato sono stati considerati i dati relativi alle caratteristiche tecniche medie dei diversi aeromobili considerando un ciclo operativo medio tipico. I risultati finali di questo studio hanno collocato al primo posto il Boeing 747 con un significativo margine rispetto agli altri modelli; infine è stato sottolineato il netto vantaggio, in termini di RPK complessivi, c…

An affordable way to implement real options to select optimal R&D portfolio

Real option Analysis (ROA) is acknowledged as a powerful tool to evaluate uncertain projects whose uncertainty depends heavily on alternatives available along the project life. The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting the optimal R&D produ…

An user friendly Real Options based Model to Optimize Pharmaceutical R&D Portfolio

Pharmaceutical industry pays great attention to its R&D process because it is a long, dynamic, very expensive, and uncertain process. On the other hand this process can be modelled as a step-wise process and each stage allows to achieve better information and generally lower uncertainty. In order to build up the best portfolio a tool able to capture the intrinsic flexible nature of the process should be selected: real options analysis has this characteristic but as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity. Basing on OptFolio, a model available in literature, this paper proposes an user friendly programming model based on Real Opti…