Evaluating Biosimilar Development Projects: An Analytical Framework Utilizing Net Present Value.

BACKGROUND

The increasing prominence of biosimilars in healthcare delivery has created the need for robust financial evaluation methods to assess development opportunities. Unlike traditional generic drugs, biosimilars require substantial investments ($100-250 million) and longer development timelines (6-8 years), necessitating sophisticated evaluation approaches.

METHODS

This study presents a comprehensive Net Present Value (NPV) analysis framework specifically designed for biosimilar development projects. Our framework incorporates key technical, regulatory, and commercial factors through a risk-adjusted NPV methodology, validated through case studies of three monoclonal antibody biosimilar development programs.

RESULTS

The analysis reveals that successful projects require minimum peak sales of $250-300 million to achieve a positive NPV, with market share and manufacturing efficiency serving as critical value drivers. Cost analysis shows that clinical development represents the largest share (57%) of total development costs.

CONCLUSION

The framework demonstrates that early market entry, manufacturing optimization, and market share achievement are key success factors, whereas technical complexity and competitive intensity significantly influence risk-adjusted returns.