Real Options: Perceived hurdles

Adaptation of the Real Option Theory in the medical world is scarce. Unlike other industries, use of real options in valuating projects is often considered to be too complicated matter. According to Myers “The value of R&D is almost all option value”. Still the benefits of Real Option Analysis is not yet fully recognized by biomedical industry as we will see in the paper of Hartmann and Hassan (Research Policy 2006; 35:343-354). Read the paper and test your knowledge in the subsequent self-assessment. Scroll down to the bottom of the webpage in case you want to download a pdf version of this paper.