We Need To Expand How We Value Companies

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

During an interview for an upcoming feature in Life Science Leader, Sanjeev Redkar, Ph.D., cofounder and president of Apollomics (a biopharmaceutical company discovering and developing oncology treatments), discussed the topic of an exit strategy. “Are you looking to exit or leave a legacy?” I queried. “To build something,” he replied. But the question must have touched a nerve, as Redkar began to opine about how biopharmaceutical companies are valued. “We always evaluate companies based on their PE ratios, speed to market, return, stock price, and all that, but there is no value assigned to the social impact a company has,” he contends. Take J&J for example, which employs a about 100,000 people globally. Depending on the size of the families associated with all those employees, that could equate to J&J helping to feed half a million people. “If J&J’s stock price goes up by 5%, and another public company employing 50 people goes up by 5%, the market treats them same. But the social impact had by J&J is much more significant. As a society, this is something we need to figure out.” Redkar says that if you go to any financial or investment website, none will have anything recognizing the social impact those companies have on people. “Maybe we need a PE ratio to the number of employees employed,” he considers. “Sure, we’ve talked about being green, and there are metrics to measure a company’s sustainability, but that misses much of what I see as ‘social impact.’”

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