Company: OSRH
Filing Date: 2025-01-29
Form Type: S-4/A
Source: 0001213900-25-007923
Chunk: 906

Company: OSR Holdings, Inc.
Filing Date: 2025-01-29
Form: S-4/A
Chunk 906
---
 discount rate in the case of rNPV is lower than in the case of NPV, as here, the R&D and regulatory risks have already been factored in. In the case of biopharma innovation, there is typically no terminal value accounted for. However, the cash flows are computed, risk adjusted and discounted until the end of the patent-protection period of an asset. Engagement of AF The M&A Committee retained the Korean affiliate of a global accounting firm (“AF”) to prepare financial models based on the commercial potential of OSR’s pipeline drug candidates for Vaximm and Darnatein (based upon Target Product Profiles (TPPs) for each asset that were developed based upon the preclinical efficacy and safety that OSR and its subsidiaries have seen to date), to understand the potential levels of revenues that could be obtained if they obtained regulatory approval (including FDA approval) and were introduced into the market. AF provided estimates of revenues from each drug candidate using differing market penetration assumptions (from start to peak market shares) per each drug candidate. AF’s operating projection and the resulting rNPV models for the two drug R&D subsidiaries of OSR assumed all product candidates obtain FDA approvals (or the corresponding approvals in other countries’ markets) and are introduced into the market. OSR’s programs are either in the preclinical phase or in early PoC (proof-of-concept) clinical studies, and they will face clinical, manufacturing and regulatory hurdles as they progress through Phase 1, Phase 2 and Phase 3 trials before possible regulatory approval in the US market. AF then estimated costs relating to the development and sale of each of its drug candidates in order to derive EBITDA, after tax operating profit and free cash flow estimates for each drug candidate assuming each of its product candidates obtained regulatory approval and were introduced into the market. The resulting free cash flow estimates were then probability-adjusted and thereafter combined to arrive at the financial projections of adjusted free cash flows of Vaximm and Darnatein, the two main subsidiaries of OSR in the drug R&D business. The probability adjustments reflected the appropriate probabilities for the therapeutic area/modality and disease indication (12.4% for immune-oncology, 8.98% for regenerative medicine, and 9.4% for protein modality) to account for clinical, manufacturing and regulatory (including FDA) approval risks in bringing a new drug candidate to market. It is unlikely that all of OSR’s current programs will obtain FDA approval or be introduced into the market