The Experts below are selected from a list of 21936 Experts worldwide ranked by ideXlab platform
Ali Hassan - One of the best experts on this subject based on the ideXlab platform.
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application of Real Options Analysis for pharmaceutical r d project valuation empirical results from a survey
Research Policy, 2006Co-Authors: Marcus Hartmann, Ali HassanAbstract:Real Options Analysis was often recommended as an emerging valuation technique for high-risk investment projects. Former inter-sectoral surveys have drawn an ambivalent picture of Real Options usage in general. In addition, there is a lack of sector-specific investigations. In the following article the results of an in-depth Analysis of collected empirical data regarding the application of this new tool in the pharmaceutical sector is presented by capturing the internal view from the pharmaceutical companies themselves and the external view from the health care departments of financial service firms. R&D stage specific modi of application, reasons for reluctance in the employment of Real Options and their assumed future prospects are elucidated.
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Application of Real Options Analysis for pharmaceutical R&D project valuation—Empirical results from a survey
Research Policy, 2006Co-Authors: Marcus Hartmann, Ali HassanAbstract:Real Options Analysis was often recommended as an emerging valuation technique for high-risk investment projects. Former inter-sectoral surveys have drawn an ambivalent picture of Real Options usage in general. In addition, there is a lack of sector-specific investigations. In the following article the results of an in-depth Analysis of collected empirical data regarding the application of this new tool in the pharmaceutical sector is presented by capturing the internal view from the pharmaceutical companies themselves and the external view from the health care departments of financial service firms. R&D stage specific modi of application, reasons for reluctance in the employment of Real Options and their assumed future prospects are elucidated.
Takao Fujiwara - One of the best experts on this subject based on the ideXlab platform.
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Real Options Analysis on Ecosystem for Agri-biotechnology Start-ups in Indonesia
Global Journal of Flexible Systems Management, 2015Co-Authors: Anjani Putri, Takao FujiwaraAbstract:Indonesia as the country that has great biological resource is considering the development of Biopark, a kind of Science Park that focuses on biotechnology. The government of Indonesia already made Biopark development plan in 2009, but to date it has not been Realized. The possible problem is that the project seems to have a negative net present value (NPV). It needs appropriate way to assess the value of investment in Biopark, considering more than one source of uncertainty and potential growth in the future. The way to commercialize the result of research and development by Biopark, which is done by start-up or established company, is also considered. Real option Analysis, especially growth option, can be a useful framework to value the investment in Biopark. Valuation of investment in Biopark by Real option Analysis is expected to encourage the stakeholders to start the project as soon as possible. This research has a role in valuing potential unique project, Biopark, especially in condition of Indonesia.
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Real Options Analysis on Strategic Partnership Dealing of Biotech Start-ups
Global Journal of Flexible Systems Management, 2013Co-Authors: Takao FujiwaraAbstract:Biotech start-ups have the competitive advantages of quicker and lower-cost at combing the innovative technologies and the niche markets, in comparing with big pharmaceutical companies. However they are facing with the short-term financing fluctuations from venture capital and initial public offering markets since this time’s financial crisis, while universities’ long-term basic research activities are continually producing life-science findings as their innovative resources. Then strategic partnerships with big pharmaceutical companies are becoming more important fundraising sources for biotech start-ups. Thus, how can such innovative but small start-ups equally negotiate their deal-structures with the resource-rich but innovation starving big pharmaceutical companies? For the research question above, a promising methodology seems the more objective metrics or analytics on the value of decision-making rather than traditional means like the comparison with similar cases or the subjective judgment based on past experience suitable for incremental improvement. Therefore this paper discusses on the opportunities and challenges of each application of the Monte Carlo simulation to cash flow forecasting of research and development investment, the rainbow sequential compound option to risk-hedge, and the stochastic optimization to negotiating the portfolio of license-fee elements.
Reinhard Madlener - One of the best experts on this subject based on the ideXlab platform.
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Evaluating the enhanced flexibility of lignite-fired power plants: A Real Options Analysis
Energy Conversion and Management, 2018Co-Authors: Barbara Glensk, Reinhard MadlenerAbstract:Abstract In this paper the authors develop a decision tool that is based on Real Options Analysis and that supports flexibility investment decisions concerning upgrades of conventional lignite-fired power plants. The value of the power plant is influenced both by technical and economic variables, the latter including subsidies. The four-step approach proposed allows to determine the optimal operation strategy in light of electricity and fuel price developments, to simulate the expected project value, to determine the expected changes of the project value over time, and finally to derive the optimal management (investment/disinvestment) decision. For the case of an existing lignite-fired power plant in Germany, we find that the plant can only be operated profitably without any modifications until the end of its technical lifetime if current government subsidies persist. In the absence of subsidies, however, it is preferable to stop operation immediately. The Analysis also shows that profitable investments in a number of flexibility retrofit measures are possible, the ranking of which depends, however, on the costs and benefits related to the retrofitting measures, as well as their implementation time.
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optimal expansion of a hydrogen storage system for wind power h2 wess a Real Options Analysis
Energy Procedia, 2017Co-Authors: Stefan Franzen, Reinhard MadlenerAbstract:Abstract Increasing penetration of wind energy in Germany challenges the transmission and distribution grid operators to ensure the sustained feed-in of wind energy. Energy storage technologies have become a widely discussed solution to balance intermittent electricity supply and demand. This paper introduces an economic Real Options-based Analysis of a hydrogen wind energy storage system (H2-WESS) deployed adjacent to a nearshore wind farm in northern Germany. The H2-WESS can be used to produce and store hydrogen when feed-in management occurs to avoid the shutdown of wind turbines and when the spot market electricity price falls below the estimated (efficiency-adjusted) market price of hydrogen. Moreover, an H2-WESS can provide negative minute reserve capacity. The modular design of the H2-WESS gives an investor the option to expand its capacity and react to new project developments. A comprehensive simulation model considers all relevant volatile inputs such as stochastic wind conditions, feed-in management events, prices, and minute reserve calls. By means of a Monte Carlo simulation, the annual revenues and their volatility are computed with respect to forecasted technology improvements till 2030. On the basis of the simulation results, a binomial Options pricing model is used to design four interdependent binominal trees and to evaluate a Bermuda-type compound expansion option. The decision trees, in which the investor can choose the maximum of the option to either expand to a further H2-WESS stage or to keep the option alive, uses 390 time steps and 76,050 decision nodes each. Every compound decision takes the option of smaller stages into account. The compound expansion option to invest in a 5, 10, 15 or 20 MW H2-WESS has a 15-year expiration time and is calculated to be about €2 million, compared to the net present value of a 5 MW H-WESS of about €-2.45 million. We conclude from the Real Options Analysis that it is crucial for a Realistic valuation of energy projects to incorporate the value of managerial flexibility that is influenced by various uncertainties. Compared to conventional power plants, and due to the modular design, the flexibility of the H2-WESS comprises many specific Options.
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Evaluating the Enhanced Flexibility of Lignite-Fired Power Plants: A Real Options Analysis
SSRN Electronic Journal, 2017Co-Authors: Barbara Glensk, Reinhard MadlenerAbstract:In this paper we develop a decision tool that is based on Real Options Analysis and that supports flexibility investment decisions concerning conventional lignite-fired power plants. The value of the power plant is influenced both by technical and economic variables, the latter including subsidies. The four-step approach proposed allows to determine the optimal operation strategy in light of electricity and fuel price developments, to simulate the project value, to determine the binomial lattice of the expected project value, and finally to infer the optimal management decision (based on the option to choose). For the case of an existing lignite-fired power plant in Germany, we find that the plant can be operated profitably without any modifications until the end of its technical lifetime only if current government subsidies persist. In the absence of subsidies, however, it is preferable to stop operation immediately. The Analysis also shows that profitable reinvestments in a number of flexibility retrofit measures are possible, the ranking of which depends, however, on the costs related to the retrofitting measures and their implementation time.
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optimal expansion of a hydrogen storage system for wind power a Real Options Analysis
2016Co-Authors: Stefan Franzen, Reinhard MadlenerAbstract:This paper presents a Real Options-based techno-economic Analysis of a hydrogen-based wind energy storage system (H2-WESS) deployed adjacent to a nearshore wind farm in northern Germany. The H2-WESS can be used to produce and store hydrogen when feed-in management takes place, in order to avoid the shutdown of wind turbines during times of excess electricity supply, or when the spot market electricity price falls below the estimated (efficiency-adjusted) market price of hydrogen. Moreover, an H2-WESS can provide negative minute reserve capacity. The modular design of the H2-WESS gives an investor the option to expand the capacity and gradually adapt to changing market conditions. The comprehensive and novel simulation model considers all relevant volatile inputs, such as stochastic wind conditions, feed-in management events, prices, and minute reserve calls. By means of a Monte Carlo simulation, annual revenues and their volatility are computed with a view on projected technology improvements until 2030. Based on the simulation results, a binomial Real Options pricing model is used to design four interdependent binominal trees and to evaluate a Bermuda-type compound expansion option. The decision trees, in which the investor can choose the maximum of the option to either upgrade the H2-WESS to the next expansion stage or to keep the Real option alive, feature 390 time steps and 76,050 decision nodes each. Each compound decision takes the option of a smaller expansion stage explicitly into account. The compound expansion option to invest in a 5, 10, 15, or 20 MW H2-WESS has a 15-year expiration time and is found to have a value of about €2 million, compared to the net present value of a 5 MW H-WESS of about €-2.45 million. We conclude from the Real Options Analysis that for a Realistic valuation of modular energy projects subject to various uncertainties it is crucial to incorporate the value of managerial flexibility that is influenced. Due to the modular design, and in contrast to conventional power plants, the flexibility of the H2-WESS comprises many specific Options.
Marcus Hartmann - One of the best experts on this subject based on the ideXlab platform.
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application of Real Options Analysis for pharmaceutical r d project valuation empirical results from a survey
Research Policy, 2006Co-Authors: Marcus Hartmann, Ali HassanAbstract:Real Options Analysis was often recommended as an emerging valuation technique for high-risk investment projects. Former inter-sectoral surveys have drawn an ambivalent picture of Real Options usage in general. In addition, there is a lack of sector-specific investigations. In the following article the results of an in-depth Analysis of collected empirical data regarding the application of this new tool in the pharmaceutical sector is presented by capturing the internal view from the pharmaceutical companies themselves and the external view from the health care departments of financial service firms. R&D stage specific modi of application, reasons for reluctance in the employment of Real Options and their assumed future prospects are elucidated.
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Application of Real Options Analysis for pharmaceutical R&D project valuation—Empirical results from a survey
Research Policy, 2006Co-Authors: Marcus Hartmann, Ali HassanAbstract:Real Options Analysis was often recommended as an emerging valuation technique for high-risk investment projects. Former inter-sectoral surveys have drawn an ambivalent picture of Real Options usage in general. In addition, there is a lack of sector-specific investigations. In the following article the results of an in-depth Analysis of collected empirical data regarding the application of this new tool in the pharmaceutical sector is presented by capturing the internal view from the pharmaceutical companies themselves and the external view from the health care departments of financial service firms. R&D stage specific modi of application, reasons for reluctance in the employment of Real Options and their assumed future prospects are elucidated.
Brandon Owens - One of the best experts on this subject based on the ideXlab platform.
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Optimizing the level of renewable electric R&D expenditures using Real Options Analysis
Energy Policy, 2003Co-Authors: Graham A. Davis, Brandon OwensAbstract:Abstract One of the primary objectives of the United States’ federal non-hydro renewable electric R&D program is to promote the development of technologies that have the potential to provide consumers with stable and secure energy supplies. In order to quantify the benefits provided by continued federal renewable electric R&D, this paper uses “Real option” pricing techniques to estimate the value of renewable electric technologies in the face of uncertain fossil fuel prices. Within the Real Options Analysis framework, the current value of expected future supply from renewable electric technologies, net of federal R&D expenditures, is estimated to be $30.6 billion. Of this value, 86% can be attributed to past federal R&D efforts, and 14% can be attributed to future federal R&D efforts, assuming continued federal R&D funding at $300 million/yr. In addition, Real Options Analysis shows that the value of renewable electric technologies increases as current and future R&D funding levels increase. This indicates that the current level of federal renewable electric R&D funding is sub-optimal.
