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Frequently Asked Questions

How does Evaluate develop the forecast estimates?

Forecasts in Evaluate are generally based on sales estimates from leading brokers. Evaluate uses forecasts from up to 6 equity analysts to develop the consensus forecasts.

A.    Are forecast numbers weighted?

I.   No, Evaluate analysts do not weight the forecast estimates when developing the consensus forecasts

     B.     Are sales forecasts risk adjusted?

I.   Evaluate analysts do not risk adjust sales themselves. Equity analysts whom we receive reports from tend to adjust their numbers to reflect probability to launch, withdrawal, and competition risks. However, biotech companies (especially small ones), often have their forecasts presented on a “best case” scenario due to the binary valuation of the company. In the case where both risk adjusted and non-risk adjusted sales forecasts are included in an equity research report, we will use the risk adjusted forecast in our consensus

C.     How often are sales forecasts updated?

I.   Consensus forecasts are updated as part of our monthly update

D.      How often are forecast years extended?

          I.   Consensus forecasts are usually extended by two years, once every two years. The extension is made once we have a sufficient number           of forecasts from analysts, usually around May

3 Caveats around the Consensus Forecast

    1. Derivation from current equity analyst forecasts.

    Forecasts in Evaluate are generally based on analyst forecasts. However, where possible, for private companies we will also use analyst forecasts to generate a forecast. This is especially true in cases where the private company books sales and a partner company books royalties; the sales can be derived from the royalty forecasts, especially if we have an idea of the royalty percentages. This method is also used for smaller non-forecasted products in big companies.

    2. Derivation from old equity analyst forecasts.

When equity analyst forecasts become old and no new ones are available, our analysts analyse the assumptions behind those forecasts, check for any macro changes in the market and sign off these forecasts as valid or amend them based on new information that may be available.

    3. EvaluatePharma constructed forecasts.

When no information is available from equity analysts or from the company itself regarding sales forecasts, Evaluate analysts construct a forecast based on a number of key factors:
    (1) Current growth trends - both quarterly and annual.
    (2) Patent & exclusivity information.
    (3) Growth trends in similar products, both pharmacologically and indication-wise
    (4) Expected changes in the competitive landscape.

This is mainly used on marketed products (you can tell current growth trends only if the product is marketed for example and the same is true for patents and market exclusivity)

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5. Do sales include royalties and alliance revenues?

6. Does Evaluate cover generics?

7. What happens when a company has a different fiscal year?

8. Where are the definitions of data items within Evaluate?

9. Why do I see two different numbers for sales within the same company?

10. What is the difference between Therapeutic Category and Indication?

1.  How does Evaluate develop the consensus forecast estimates?

a. Are forecast numbers weighted?

b. Are sales forecasts risk adjusted?

c. How often are sales forecasts updated?

d. How often are forecast years extended?

2. How often does Evaluate update the data?

3. Does Evaluate have historic and/or forecasted sales?

4. Does Evaluate have Sales by Indication?

How often does Evaluate update the data?

Daily updates include: press releases, share prices, NPVs, Calendar of Events, Event Analyser, Clinical Trials data, and EP Vantage articles

Weekly updates include: updates from Drugs@FDA and venture financing information

Monthly updates include: consensus forecasts, merger information, and any product phase changes

Quarterly updates include: Product sales are updated within 24-48 hours after company financial reports are released

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Does Evaluate have historic and/or forecasted sales?

Forecast sales are available on a Worldwide basis and for the USA

Historic sales are available for Worldwide, USA, Japan, Brazil, and Europe

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Does Evaluate have Sales by Indication?

Yes, Evaluate currently offers Sales by Indication coverage on over 4,000 products. Evaluate’s Sales by Indication provides indication-specific sales of an individual product compiled mainly through Equity Analyst research and augmented by proprietary Evaluate methodologies. Please refer to our Sales by Indication Methodology document for more information

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Do sales include Royalties and Alliance Revenues?

Royalty and Alliance Revenue for a product are reported separately from sales. The Royalty and Alliance Revenue reported for a product is not additive to sales, as it is already included in the revenue of another company. Evaluate breaks out the Royalty and Alliance Revenue to detail the relationship between the companies involved in the product

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Does Evaluate cover Generics?

Evaluate does not cover all generic products. The product portfolio only covers the commercially significant generics for a company (those that disclose sales data for which specific information is disclosed by the company). Therefore sales data for generic products is available in Evaluate, but it is not as comprehensive as it is for branded products

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What happens when a company has a Different Fiscal Year?

Annual sales are always based on a company’s fiscal year, so we stay in-line with the way the company reports their annual sales and equity research reported sales. If a company has a year-end prior to June 30th, then its financial year will be counted as being in the prior year. For example, if the financial year for a company ran April 2016 to March 2017, Evaluate would report this within the calendar year of 2016

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Are there definitions of data items within Evaluate?

Yes, you can see definitions by clicking on a data column header and a pop-up box will appear with the definition. You can also see definitions when building a report. Just hover over the report component and a definition will appear on the same page. Lastly, in financial and operating data reports, click on the drill down button to see the definition and formula of the item

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Why do I see two different numbers for sales within the same company?

When a company reports its financial's, it will disclose sales of certain key products in its portfolio. These sales figures are associated with the appropriate product in the Products Module. We can then add these up at a company level. However, as there may be additional sales which are not attributed to a specific product, then the sum of the identified product sales may be less than the total sales for a company. The difference between the Total WW Prescription (Rx) Sales for a company and the Rx Sales from Products Module is classified as ‘Other Rx and OTC’ or ‘Other (Therapy Area Name)’

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What is the difference between Therapeutic Category and Indication?

A therapeutic category is a product classification, with a one-to-one relationship with a product. An indication is the disease(s) the product is either approved or being developed to treat. Indications can have a one-to-many relationship with a product. For example, Avastin is classified as an oncology drug (therapeutic category). Avastin is approved to treat 9 different cancers including colorectal cancer, breast cancer and renal cell carcinoma (indications).

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