Definition and Meaning of the Relative Asset Value Index (RAVI) -
The Relative Asset Value Index (RAVI) for a pharmaceutical compound corresponds with the “RELATIVE VALUE” of the asset within a disease or indication at “A GIVEN TIME“. The score is correlated with the likelihood of a transactional event corresponding to value creation (M&A, licensing, investment, advancement of stage). The purpose of the score is to offer clients the ability to compare relative value between assets at a given time. Value creation for a pharmaceutical asset is highly dependent on the stage of development (both clinical phase, and experimental stage), thus more advanced assets are likely to have a higher score. Other factors which influence value include but are not limited to competitive environment, scientific evidence, research trends, investment, proof of mechanism, research investment, FDA trends, transactional trends, and others. The Relative Asset Value Index (RAVI) can rise and fall and is deliberately weighted to be insulated from popular opinion (e.g. a clinical failure in a given mechanism may have a negative effect initially, but the negative effect will decay over time if other evidence builds).
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