Programme rNPV
Revenue to risk-adjusted cash flow to a value.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: programme rnpv.Updated 30 September 2026
Part of healthcare financial models, with the models, labs and guides around it.
What it does
One programme’s value. Net revenue less cost of goods, selling and marketing, development cost until launch and the pre-launch commercial build gives an operating profit; tax on profits gives cash flow; the risk weight gives risk-adjusted cash flow; a mid-year discount factor gives present value; the sum is the rNPV. The unrisked NPV sits beside it, so the reader sees how much of the programme is probability.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, row 6: Year
- Programmes, rows 24–27: Development cost, annual, Cost of goods, % of net revenue, Selling and marketing, % of net revenue, Pre-launch commercial cost
- Programme A, rows 19–34: Cost of goods, Selling and marketing, Development cost, Pre-launch commercial cost…
- Programme B, rows 19–34: Cost of goods, Selling and marketing, Development cost, Pre-launch commercial cost…
- Programme C, rows 19–34: Cost of goods, Selling and marketing, Development cost, Pre-launch commercial cost…
What a reviewer looks for
- Development cost continuing after launch.
- Losses sheltering tax without a carry-forward being modelled.
- End-of-year discounting on flows that arrive through the year.
Learn it, then build it
Build · Lab · ~12 min
Biotech Readout
Multiply stage probabilities, risk-adjust a programme, value a company in each outcome with a cash floor, and read the implied probability of success off a share price.
Read · Guide · 12 min
Biotech Valuation: rNPV, Launch Curves and the Sum of the Parts
Read · Guide · 12 min
How to Build a DCF Model: Build Order, Terminal Value and the Sanity Checks
Vocabulary: rNPV (Risk-Adjusted Net Present Value).