Finance for Non-financial Managers in the Pharma Industry

A 2-day In-house guide to the essentials of effective financial and commercial skills for non financial managers working within the pharmaceutical and biotech sectors

Course Overview

Achieving R&D success is probably the key driver that defines the pharma industry, but whatever area you work in, your managerial performance is eventually translated into numbers. These numbers are used to measure your performance and that of your organisation.

In an increasingly competitive world you need to ensure you have sufficient grasp of the financial tools and techniques available to maximise and add value to your business. This intensive and detailed two-day programme has been developed to deliver everything you need to know about financial management in the context of the pharma industry. Using financial accounts, examples and cases from the pharma industry over the two days it will examine, explain and apply financial and commercial tools and techniques. By the end of the two days you will be a financially aware manager and be able to impact on financial efficiency and profitability within your organisation.

The key objectives of the programme

  • UNDERSTAND the language, terminology and structure of accounts
  • FAMILIARISE yourself with the business finance cycle in the pharma industry
  • LEARN how to manage and measure cash flow to ensure financial success
  • DEVELOP your skill at planning, evaluating and controlling budgets within this highly regulated sector
  • EXAMINE how operational performance is analysed in financial terms, and what is expected of a pharma company
  • APPRECIATE the role of financial management and future looking decision making within a financial context
  • GET-TO-GRIPS with the application of key ratios for effective financial performance
  • UNDERSTAND and anticipate the financial drivers and concerns of pharma customers, suppliers, shareholders, investors and analysts

Who should attend?

This programme has been designed to increase and develop the financial awareness and commercial skills of individuals from all levels of the organisation within the pharma and biotech sector. If profit responsibility is a requirement in your role but you do not have the foundation of a formal financial training upon which to base your decisions this course will enable you to fulfil your role more effectively.

This includes:
Managers, team leaders and technical specialists from R&D, clinical, regulatory, commercial, sales and marketing, manufacturing, distribution and purchasing.

Sample Programme

THE PHARMA BUSINESS MODEL
  • How cash ‘flows’ in your business
  • Equity, debt and leverage – how muchdebt in a pharma business?
  • How much debt is appropriate in a pharma business?
  • The difference between turnover, cash and profit
  • Capital expenditure (Capex) and operating expenditure (Opex)
  • Tangible and intangible assets – what are the differences?
FINANCIAL TERMINOLOGY AND POLICIES IN PHARMA BUSINESSES
  • Margin versus mark-up
  • Gross and net margins
  • COGS, SGA
  • Depreciation and amortisation
  • Revenue recognition
  • EBIT, EBITA and EBITDA
  • Accruals and prepayments
  • Capitalisation of project costs
  • Reserves
  • R&D costs – alternative methods of Pharma accounting
INTERPRETING THE KEY FINANCIAL STATEMENTS
  • Balance Sheet
  • Cash Flow Statement
  • Income Statement (Profit & Loss)
    • Published accounts of pharma companies will be reviewed and compared
  • Management accounting vs financial accounting
  • Types of organisation and their publishing requirements
  • Accounting standards (IFRS, IAS, GAAP)
KEY BUSINESS RATIOS OF PHARMA BUSINESSES
  • Use and calculation of key ratios: Profit margins, asset velocity, return on investment; gearing, interest cover and liquidity – inventory, receivable and payable days
  • Specialist pharma measures: COGS as a % of product sales, R&D as a % of turnover, S, G&A as a % of product sales
  • EBIT and EBITDA
  • Intangibles – In-process R&D, goodwill and brands, patents and IPR
  • Earnings and dividends per share, dividend cover
THE CITY VIEWPOINT
  • How to read the financial pages: dividend yields, price-earnings ratios, market capitalisation of pharma companies
  • What influences share price?
  • What is meant by terms such as ‘equity’ and ‘shareholder value’ and EVA?
  • Why EBIT and EBITDA are key measures of performance
  • Understanding investor expectations and capital market pressures on businesses
  • Analyst predictions and forecasts
  • Exceptional items – accounting treatment
  • Gearing and Leverage – why they are different
  • Free Cash Flow – how it is calculated and what it means
COST and PRICING
  • The relationship between price, volume and costs
  • The Profit Improvement Model
  • Fixed, variable, direct and indirect costs
  • Break-even analysis
  • Relevant, opportunity and sunk costs
  • Overhead allocation using standard costing
  • Marginal costing vs full costing
  • Activity Based Costing and ‘cost to serve’
  • Key Performance Indicators in a pharma business
CORPORATE PLANNING AND BUDGETING
  • How the business plan fits with the budget
  • Planning techniques and business planning models
  • The fit between business strategy and financial strategy
  • The Balanced Scorecard and its application in a pharma business
  • Budgetary control – techniques
  • Alternative methods of budgeting – focus on business processes and key performance indicators
THE BUSINESS CASE
  • The business case template
  • The principles of investment appraisal (time value of money, cost of capital, relevant cash flows)
  • The key methods of evaluating capital projects
    • Payback
    • Net Present Value
    • Internal Rate of Return
  • Dealing with uncertainty and risk – ‘what if’ scenarios
FINANCIAL STRATEGY
  • What is the appropriate level and type of funding in a pharma business?
  • How do we decide the dividend policy?
  • How do we value a business for acquisition?
  • How does financial strategy fit with business strategy?

Recommended Trainer

George Fildes is Managing Director of Qualitas Consultancy which specialises in financial training and consultancy. With over twenty years experience in general management, George’s experience spans business management, logistics, customer operations and financial management. He has been involved with mature, turnaround and startup companies. In 2001 he established Qualitas Consultancy and has since developed a series of tailored business improvement programmes. Pharma clients include Pfizer, Takeda, Kimberley Clark, NHS, Caridian BCT and Novartis. George is a Chartered Management Accountant (FCMA) with a Cranfield MBA. He also has a Diploma in Marketing and is an accredited finance tutor for the Chartered Institute of Management Accountants (CIMA).

Continuing professional development

This course qualifies for the following CPD programmes:

  • Certificate

Bespoke training

We can customise this course to meet the requirements of your organisation. Contact us to discuss your training requirements.

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  • Affitech AS
  • Albumedix Ltd
  • Almac Group
  • AstraZeneca AS
  • Bayer HealthCare
  • Dafra Pharma International NV
  • Debiopharm International SA
  • Dr Reddys
  • F Hoffmann-La Roche AG
  • Ferring International Center SA
  • FMC BioPolymer
  • Genzyme Europe BV
  • Grünenthal Pharma GmbH & Co KG
  • Intervet Ireland Ltd
  • JADRAN-GALENSKI LABORATORIJ d.d.
  • LEO Pharma
  • Nikem Research Srl
  • Novartis Pharmaceuticals UK Ltd
  • Novo Nordisk
  • Novo Nordisk LLC
  • Orphan Europe
  • PARI Pharma GmbH
  • Pfizer Ireland Pharmaceuticals
  • Pharmachemie BV
  • RSA Group
  • Shire Development Inc
  • Stiefel Laboratories
  • TFS Trial Form Support International AB
  • Tibotec Virco Veirology BVBA