In the pharmaceutical sector a drugs pipeline consists of the drugs that a company has under development or is testing. This includes completely new drugs, variants of existing drugs and new applications of existing drugs.
The pipeline starts with new drugs discoveries and it is important to asses companies’ ability to discover new drugs as well as drugs that are currently in the pipeline - the early stage (start) of the pipline needs to be refileld as drugs move up
New drugs require extensive development, pre-clincal testing, three stages of clinical testings and then have to approved in each country the company wishes to sell the drug in.
It is not uncommon for companies to buy and sell drugs that are in various stages of development, or to enter into agreements to jointly develop or market drugs. In these circumstances one company may receive milestone payments from another for completing particular stages of development, trials and approval as well as royalties on the drug once it is marketed.
Although larger pharmaceutical companies always ahve pipelines with many drugs in them, which may appear to spread the risk, it is often the case that most of the value of the pipeline lies in a small number of drugs - or even in a single “blockbuster” drug
Assessing the pipeline is often the most important part of valuing a company and the most difficult. Companies largely dependent on established products are easier to assess, and there are fewer uncertainties in the valuation. The best growth opportunities in the sector are small companies with a plaform for developing new drugs which are of course very uncertain.
Exactly this is what we have here:
http://www.chartsbank.com/PipelineList.aspx
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