Intro
We are often asked by clients how they can use a risk-adjusted net present value (rNPV) for deal term negotiations for an asset. The rNPV methodology is discussed in depth in several of our other articles, including “Valuing Pharmaceutical Assets: When to Use NPV vs rNPV”, and the exercise of generating one has its own value by providing clarity and consensus within a management team. Once the process of modeling defensible assumptions is completed and the asset’s rNPV is generated, it can be a critical tool for negotiating deal terms for several key reasons.
