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Robert, I've been retired for a while now, but I don't know any company using the sorts of methods you mention (decision trees, portfolio optimization) for preclinical candidates.  In fact, I would be surprised to learn that many of them even think in terms of NPVs for these opportunities.  It seems to me that companies (appropriately, in my view) look at preclinical opportunities as inexpensive options on development projects.  Of course, if you have more preclinical candidates than you can handle, you need a way to choose among them, but I don't believe people use very rigorous methods for this. 

Thank you, Tom, for taking the time to reply to my inquiry.  I have been away from this area for a number of years and from reading your post things haven't changed that much in early-stage and platform assessment.  I've been following the high valuations paid for early-stage work and was wondering what underlying models were being used.  Otherwise, it sound like an auction.  I've seen some fairly sophisticated modeling done in unrelated fields--whether they add any improvement over back-of-the-cocktail napkin approach I don't know.

Anyway, thanks again.

Bob Freeman

Hi Robert,

just got to this discussion thread, having worked in this area for a number of years as a consultant to various pharma and biotech companies I have observed that the industry has definitely become more rigorous and sophisticated in its portfolio management practices (I would like to believe I had something to do with it). Clearly there is a wide range of practices which depend both on size of the enterprise and how quantitatively inclined senior management is. The attached article which I wrote a few years ago is a pretty good description of where the industry is at, hopefully you'll find it useful

Best, jPPRM.pdf

Jan, many thanks for forwarding the attached file.  I look forward to reading it over the weekend.  I really appreciate you sharing your work.  (As an aside, your name is awfully familiar but I can't remember if our paths have crossed.)

Bob Freeman