I am looking for Healthcare specific accounting questions or interview questions to consider for a healthcare IB role.
Basically, other than the general valuation methodologies and other general IB questions. What should I be prepared for a technical interview?
For example, for software companies is important to adjust EBITDA for coding expenses that are capitalized rather than expensed. Something similar for Healthcare? Most popular multiples that are used? Unusual valuation details that I should be aware of? Accounting details that I need to be aware of?
Thanks
If you let me know what company the interview is for, I may be able to help guide you better because I can tailor it to the vertical they're most focused on
It’s a small boutique in Northern Europe. Does deals in any verticals. I just do not have any experience in the healthcare work and I would like to know what are some interview questions that are tailored to healthcare
Would look to see what vertical they mostly work in and the focus on that. A lot of HC companies are valued just like any other company. However, if you start getting into biotech / pharma / health insurance, it might be a bit more nuanced. Otherwise you just use EBITDA multiples and standard DCFs.
I work at a multi billion + HC focused fund so I can shed a little light on the matter. In terms of valuation the one difference that you need to account for is that in DCFs you need to take into consideration the probability of success of a drug. In a normal company you would not have to account for this risk but in HC this is something that must be taken into consideration. As well, it is important to understand patent life as revenues for a drug should not have a large terminal value if any after patent expiration. In terms of multiples it usually is based off rev and EBITDA. Hope this helps.
Likewise, you also need to look into the uptake curve and what peak penetration looks like. The probability of success is going to be dependent on the therapeutic area
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