Binary Event

A single result that moves a company’s value to one of two levels, such as a trial readout or a regulatory decision. Before it, a biotech is worth the probability-weighted average of the two outcomes; after it, it is worth one of them, which is why its shares can double or halve in a morning.

Where Binary Event comes up

Biotech Valuation: rNPV, Launch Curves and the Sum of the PartsA company with no earnings is valued on what its pipeline would earn if it worked, weighted by the chance that it does.Read the guide — 12 min

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Healthcare financial models

Related Healthcare terms

Gross-to-Net Implied Probability of Success Installed Base Loss of Exclusivity (LOE)Razor-and-Blade Model Peak Sales

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