Fin­ance and Ac­count­ing in Bio-Busi­ness

Course content

Course Content

Bio ventures and pharmaceutical companies rely heavily on strategic relationships to external stakeholders such as large costumer organizations, partners for out-sourced R&D, suppliers of venture capital etc. The development of new drugs and medico technical products is highly uncertain and development times are lengthy. Their internal operations (largely research) are difficult to manage and control by conventional approaches, and managing cash flows and portfolios of projects is challenging. These characteristics tie together a set of closely related issues in the financing and management of bio ventures and pharmaceutical companies. This course addresses these interdependent issues by teaching key concepts and tools of finance and management accounting.

Topics in management accounting focus on decision making and control for start-ups and established firms. Course components include the health economics, pricing in lifesciences, control and incentives in product development processes, cost accounting and budgeting.

The finance part of the course will mix entrepreneurial and corporate finance to deal with issues in forecasting and planning cash flows, the calculation of present and real option values of projects, relationships to VC, BA and Stock markets and how to secure funding for start-ups.

Teaching and learning Methods

The course will mix lectures with casework and simulations. There will be excel-based casework in class for the finance part.

Some sessions have a link to short videos explaining basic elements of particular techniques (Cost allocation, performance management/balanced scorecard and Budgeting). It may give you a good start on the reading if you watch the videos before reading.

Feedback will be given in class on quizzes, casework and simulations in class. Feedback will also be given in office hours.

Learning Outcome

The course enables students to analyze how their internal operations and external relationships can be managed an environment characterized by high uncertainty and where the development of the firm is dependent on both creative processes and the ability to handle relationships to stakeholders such as venture capitalists, stock markets, suppliers and customers. Students learn to design appropriate solutions for controlling innovation and product development. They learn how to plan cash flows, secure funding and manage portfolios of bio projects. They become capable at identifying opportunities and pitfalls of different finance and control mechanisms, to understand how they change over the life-cycle of the firm, and to use the acquired knowledge to build and successfully develop innovative enterprises.