On the Valuation of Companies with Growth Opportunities

Each company faces day to day investment opportunities. Just by staying in business the company is taking a decision of reinvesting capital. These opportunities have to be fairly valued to overcome misallocation of resources. A project with high growth opportunities requires high reinvestments to take full advantage of them until it reaches its mature stage. These investments can be seen as a succession of call options on future growth. When a company with such prospects is valued using the discounted cash flow technique and growth is taken implicitly in the growing cash flows and the residual value, the value thus obtained will be higher than the true one (under certain circumstances). Technology advances and the effects of globalization create enormous growth opportunities, and so misvaluation risks are higher.real options; valuation; contingent claims valuation

Time to Switch to Second-line Antiretroviral Therapy in Children With Human Immunodeficiency Virus in Europe and Thailand.

Background: Data on durability of first-line antiretroviral therapy (ART) in children with human immunodeficiency virus (HIV) are limited. We assessed time to switch to second-line therapy in 16 European countries and Thailand. Methods: Children aged <18 years initiating combination ART (≥2 nucleoside reverse transcriptase inhibitors [NRTIs] plus nonnucleoside reverse transcriptase inhibitor [NNRTI] or boosted protease inhibitor [PI]) were included. Switch to second-line was defined as (i) change across drug class (PI to NNRTI or vice versa) or within PI class plus change of ≥1 NRTI; (ii) change from single to dual PI; or (iii) addition of a new drug class. Cumulative incidence of switch was calculated with death and loss to follow-up as competing risks. Results: Of 3668 children included, median age at ART initiation was 6.1 (interquartile range (IQR), 1.7-10.5) years. Initial regimens were 32% PI based, 34% nevirapine (NVP) based, and 33% efavirenz based. Median duration of follow-up was 5.4 (IQR, 2.9-8.3) years. Cumulative incidence of switch at 5 years was 21% (95% confidence interval, 20%-23%), with significant regional variations. Median time to switch was 30 (IQR, 16-58) months; two-thirds of switches were related to treatment failure. In multivariable analysis, older age, severe immunosuppression and higher viral load (VL) at ART start, and NVP-based initial regimens were associated with increased risk of switch. Conclusions: One in 5 children switched to a second-line regimen by 5 years of ART, with two-thirds failure related. Advanced HIV, older age, and NVP-based regimens were associated with increased risk of switch