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20-F
MESOBLAST LTD filed this Form 20-F on 08/31/2018
Entire Document
 

clearly defined and the responsibility for refining those assumptions has been assigned to the most relevant business units. The remeasurement charged to the consolidated income statement was a net result of changes to key assumptions such as developmental timelines, product pricing, market population, market penetration, probability of success and the increase in valuation as the time period shortens between the valuation date and the potential settlement dates of contingent consideration. 

 

The fair value of contingent consideration

 

As of June 30,

 

(in U.S. dollars, in thousands)

 

2018

 

 

2017

 

Fair value of cash or stock payable, dependent on

   achievement of future late-stage clinical or regulatory

   targets

 

 

23,674

 

 

 

34,501

 

Fair value of royalty payments from commercialization

   of the intellectual property acquired

 

 

18,396

 

 

 

29,094

 

 

 

 

42,070

 

 

 

63,595

 

 

The main level 3 inputs used by the Group are evaluated as follows:

 

Risk adjusted discount rate:

 

The discount rate used in the valuation has been determined based on required rates of returns of listed companies in the biotechnology industry (having regards to their stage of development, their size and number of projects) and the indicative rates of return required by suppliers of venture capital for investments with similar technical and commercial risks. This assumption is reviewed as part of the valuation process outlined above.

 

 

 

Expected unit revenues:

 

Expected market sale price of the most comparable products currently available in the market place. This assumption is reviewed as part of the valuation process outlined above.

 

Expected sales volumes:       Expected sales volumes of the most comparable products currently available in the market place. This assumption is reviewed as part of the valuation process outlined above.

170

 



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