As investment and collaboration in new drug development increase, the demand for new drug development valuation, which assesses the business value of new drug development projects, is growing.
In particular, global licensing is an important strategy for domestic companies, so there is a strong need for valuation to estimate licensing transaction prices.
The valuation model for new drug development has been developed based on factors such as development period, success probability, and sales pattern, which are different from those of other industries.
However, in Korea, there are very limited educational courses or materials available to systematically learn about the value assessment of new drug development.


Since 2017, I have been teaching a course titled “Pharmaceutical Technology Valuation” at the Graduate School of Sungkyunkwan University, and I have felt a strong need for a book that comprehensively covers both theory and practice.
This book is structured to enable systematic learning based on accumulated information and knowledge, as well as questions frequently raised in lectures and corporate consulting.
While understanding financial models is important for assessing the value of new drug development, it is even more crucial to reliably estimate input variables such as sales and success rates.
Reflecting these points, this book is structured as follows:


In the first part, Chapters 1 and 2, we explained the process of new drug development, which is the subject of valuation, and various technology valuation methodologies.
Chapters 3 through 8, the second part, cover methods for estimating the input variables of valuation, such as time, probability of success, sales, cost, and discount rate.
Chapters 9 and 10 cover valuation in license agreements and sublicense agreements, which are the primary purpose of most new drug development valuations.
Finally, Chapter 11 introduces practical guidelines for the implementation and use of technology valuation.
The concept of evaluating the value of new drug development cannot be learned by simply observing it, but by actually calculating and applying the numbers.
To this end, all examples covered in this book can be downloaded as Excel files via QR codes for practice.
In this book, the amount is expressed in 'millions of dollars' as a rule.


Most of the quoted amounts are calculated in US dollars, so they were not necessarily converted to Korean Won.
I did my best to make this a good book, but there may be some shortcomings.
We ask for your understanding on this matter. Any revisions that may occur after publication will be provided in the data room of the Free Academy website (www.freeaca.com), so please refer to it.
Finally, I believe this book may be the first to be published in Korea on the evaluation of new drug development.
I sincerely hope that this book will serve as a small stepping stone to advance the level of discussion on the theory and practice of new drug development value assessment.