Question Based Clinical Development paper published in Nature Biotech

Blended learning

Published on 2020-01-16

Written by Paul Janssen Futurelab

This month’s Nature Biotechnology features our paper describing Question Based Clinical Development: a new approach to define the most optimal route to develop new medical interventions such as drugs and medical devices.

Paul Janssen Futurelab

In the life sciences, investment decisions regarding research and development (R&D) projects, licensing deals and mergers are often based on value calculations that depend on assumptions about development time, cost and future revenues1. Scientific considerations specific to the product being developed and the indication are rarely taken into account. These value calculations — and the resulting management decisions based on them — can determine the research project’s fate and can affect the development process. All biomedical researchers should therefore have a basic understanding of the possibilities and shortcomings of financial valuation. Entrepreneurial biomedical researchers who are involved in developing new medical interventions are ideally suited to integrate financial and scientific considerations in order to calculate the value of an R&D project. Here, we explain classic financial valuation by the measures of net present value (NPV) and risk-adjusted NPV. Moreover, we introduce an alternative method based on real option analysis (ROA) that integrates financial project valuation with scientific considerations for critical path-finding in product development.