At Zaylan, we specialize in providing a range of equity value on companies participating in life sciences including diagnostics, life sciences tools and digital players.  We have developed multiple methods to arrive at ranges of valuation based that have been applied to life sciences players.  Given the uncertainty in making business forcasts of companies in life sciences, estimating value is always a challenge.  We take multiple approaches from traditional DCF approaches, comparable analysis, technology replacement as well as CFROI Fade approach (particularly suited to high growth players) in order to estimate ranges of valuation.

Distributed Cash Flow

  • Traditional discounted cash flows method
  • Two scenarios are used: 1) realistic, based on the early growth years of comparable instrument players; 2) aggressive, assuming faster penetration

Venture Capital ROI methods, based on revenue multiples & P/E ratios

  • Estimates the future value of a company at exit, then calculates the valuation required currently to provide the return on investment expected by investors such as VCs, assuming a liquidity point in FY 2009
  • While a shorter investment horizon is desired, the timing of the inflection point in the revenue growth justifies targeting an exit in 2009 rather than 2008

Technology Replacement Cost

  • Estimates the current value of a company based on the investment a large player needs to make to develop a competing product (disregarding patent protection)
  • Calculates the technology cost, plus a combination of premiums and discounts for elements adding or reducing the value or the replacement cost of the technology

Comparable Revenue, Earnings

  • Estimates the current value of the company using the revenue and earnings multiples offered to comparable companies by public capital markets as well as in M&A translations