Company: OSRH
Filing Date: 2025-01-29
Form Type: S-4/A
Source: 0001213900-25-007923
Chunk: 905

Company: OSR Holdings, Inc.
Filing Date: 2025-01-29
Form: S-4/A
Chunk 905
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. The intangible nature of the assets in the biopharma industry is commonly quantified under Income-based approaches. One of the most broadly and commonly accepted methods in the industry is the rNPV (risk-adjusted Net Present Value) approach. Additionally, market-based approaches in the form of comparables and analogs, allow for the sourcing and corroboration of several assumptions, mostly at project and portfolio company level. In estimating the total Enterprise Value of OSR, we relied on the results from multiple scenarios using rNPV method, with consistency checks using market-based comparables and analogs. The NPV method estimates the future debt-free cash flows that an asset is expected to generate. Expected costs (cash outflows) mainly cover R&D, manufacturing, license fee payable to licensors (i.e., innovation sourced from universities or other industry players), general and administrative costs (G&A) and taxes and, in case the company is expected to commercialize the asset on its own, all cost of goods (COGs) and cost of marketing and sales (M&S). Expected revenues (cash inflows) depend on the conduction strategy and opportunities, they can be in the form of upfront, milestones and royalties in the case an asset is transferred to a third party for R&D continuation and commercialization (i.e., license of an asset), or in the form of sales may the biotech turn into a commercial-stage company with its own sales force, or in the form of service revenues. Expected revenues can also be a mix of these approaches, i.e., an asset may be conducted differently on a country-by-country basis. Expected revenues may also include grants, which is a common type of R&D subsidies in some countries and/or for some R&D field or indications (i.e., from foundations and patient associations). These future cash flows are converted to their present value equivalents using an estimated discount rate (or required rate of return). Annex I-8 The rNPV method relies on these same principles of the NPV method, and additionally involves certain risk adjustments which more closely reflect the inherent R&D and regulatory risks of drug development. A wealth of data in the biopharma area is made publicly available to track historical LOA (Likelihood of Approval) across the R&D fields (i.e., type of molecule, of indication, of regulatory designation). These LOAs allow to account for risks at each R&D step. For this, the expected cash flow for a given risk phase is multiplied by the probability of it occurring. The