From Balance sheet to economic analysis

Dott.ssa Notaro

Dott.ssa Stefanoni

What we are going to study

Balance sheet analysis and Income Statement analysis

Financial CBAEconomic CBA

Producing ARV in Sub-Saharan Africa

The project aims to increase the offer of Antiretroviral drugs in Sub-Saharan Africa by reducing the price of Antiretroviral therapy

Project stakeholders– Private sector Sigma Tau– Government Sudan Government

Project Objective

Project activities

Build up a plant to produce and can Antiretroviral (ARV) drugs in Sudan

Finance the research on AIDS vaccine for both adults and children

Expected impact

Increase life expectancy of infected people Improve the quality of life by transforming a

mortal disease in a manageable chronic illness

Alleviate the economic impact of HIV/AIDS in

Sub-Saharan Africa

Analysis structure

Balance Sheet and Income statement analysisFinancial CBA

Sigma Tau

Economic CBA Sudan Government

Social and Economic Framework

In the world there are 40 millions people living with HIV

Africa accounts for 10% of the total world's population but the 83% of deaths caused by AIDS occurs in Africa

Sub-Saharan Africa accounts for 28.1 people living with HIV/ADS.

WHO’s members have reached an agreement to allow LDCs countries to make use of compulsory licenses to import or produce in loco low cost generic drugs

Market Analysis: Demand

Africa didn’t experiment any reduction in the rate of prevalence of HIV/AIDS

Between 1990 and 2000 the spread of epidemic has increased in the region

At present in Africa the 99% of people living with HIV don’t have access to ARV Therapy (ART)

Potential demand

Country All people with HIV

Adult 15-49 Women 15-49

Children 0-15

Adult rate %

Estimated deaths in 2001

Sudan 450.000 410.000 230.000 30.000 2,6 23.000 Chad 150.000 130.000 76.000 18.000 3,6 14.000 Eritrean 55.000 49.000 30.000 4.000 2,8 350 Ethiopia 2.100.000 1.900.000 1.100.000 230.000 6,4 160.000 Iraq < 1.000 < 1.000 150 n.a. < 0,1 n.a. Tanzania 1.500.000 1.300.000 750.000 170.000 7,8 140.000 Total 4.256.000 3.790.000 2.186.150 452.000 4.64 337.350

Market Analysis: Supply

ART has become more affordable through international competition between producers of generic drug. (From 10.000 US$ per year to 290US$ per year)

So far there are not factories that produce ART in Sub-Saharan Africa

Expenditures

Investment costs– Engineering costs– Personnel costs

Operating costs– Row materials – Personnel– Distribution

CBA and Balance sheet

Costs

Balance sheet Income Statement Financial ACB Economic ACB

Intangible assets + Property Plant and Equipment

Investment costs

Investment costs * Conversion Factors (= Shadow Prices)

Production Costs:-Raw materials-Service Expenses-Personnel Costs-Other Accruals

Operating costs Operating costs * Conversion Factors (= Shadow Prices)

Benefits

Balance sheet Income Statement Financial ACB Economic ACB

Production value:

-Revenues from sales (adults)

-Revenues from sales (pediatric) Others Revenues

Revenues deriving by selling the drug on the market

Value of life + Economic Growth

Benefits