rNPV Valuation of BaRA Tokens

Travis Molloy
Jul 10 · 3 min read

The article is about the results of applying an industry standard valuation tool to forecast the potential value of BaRA Tokens.

Important Disclaimers

This document does not represent a ‘guarantee’ of any kind from Banksia BioPharm or a forward looking statement. Its purpose is to show potentiality, using an industry standard Biotech Valuation Tool and how the company’s potential revenue accounted for with risk could influence the BaRA Token’s value.

Overview

The Banksia BioPharm’s BaRA rNPV & Token Valuation is derived from a third party Microsoft Excel tool built upon an rNPV (reverse Net Present Value) calculation that is considered best practice in the Pharmaceutical Industry. Known industry values and figures are ‘plugged in’ and a Biotech company valuation can be derived. One output of the rNPV calculations is yearly forecast revenue which enables a second rNPV valuation of future royalties.

The above can then be applied to the Tokenisation of royalties, and Token values can be forecast too via rNVP.

Key Features:

The beauty of this tool is that it is very difficult to argue with:

1. The tool itself is considered industry best standard;

2. The inputs are basic facts, industry knowns and probabilities

3. Any assumptions made by the valuator are highlighted and visible

4. Risk adjustment is inherently built into the tool

How it Works:

Key Inputs & Assumptions:

1. A Royalty Deal Rate of 20% (target)

2. Peak Market Penetration Post Marketing of 5% (highly conservative)

3. 400 Million BaRA Tokens on issue (likely to be lower with the ‘burn strategy’)

4. 4 years of Pre-Market Development (time to Royalty Payments)

5. Clinical & Approval likelihoods of success (source Pharmaceutical Manufacturing & Research Association):

a. Preclinical — 80%

b. Phase I — 20%

c. Phase II — 30%

d. Phase III — 67%

e. FDA Approval — 81%

f. Annual Post Marketing — 90%

rNPV Outputs:

Note that the graph below represents in orange the token value based on the linked pharmaceutical asset. Other market factors will be in play however a sophisticated buyer who looked at all factors and conducted proper due diligence would agree it to be a ‘fair’ market valuation. The olive coloured line shows annual per token returns, and the purple cumulative returns per token over 20 years.

Note too that the ‘year one’ starting token value calculates to US$3.85. The decline in value post year 9 is driven by the product’s 20 to 25 patent life (i.e. Royalties may stop at the expiration point).

Conclusion

This analysis only takes into consideration risk adjusted future royalty revenue as a basis for the value of BaRA Tokens year by year. Clearly other market forces will be at play, especially in the volatile cryptocurrency markets. Adjusting any of the key assumptions and risk factors will obviously change the outcome of the analysis. Failure temporarily or completely of the BaRA Anti-inflammatory at any stage or risk point would have a strong negative impact on BaRA token value.

Important Disclaimers

This document does not represent a ‘guarantee’ of any kind from Banksia BioPharm or a forward looking statement. Its purpose is to show potentiality, using an industry standard Biotech Valuation Tool and how the company’s potential revenue accounted for with risk could influence the BaRA Token’s value.

Banksia BioPharm

Changing the way we treat inflammation

Travis Molloy

Written by

Executive Chairman of Banksia BioPharm

Banksia BioPharm

Changing the way we treat inflammation

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