On Taiwan Stock Exchange and Over the Counter market, enterprises’ market value and the book value are always different. The viewpoints of the organization management, these differences are attributed to "intangible asset". That is, intangible asset value create market price. In Biotechnology and Pharmacy industry, the 「market value/ book value 」ratio is the highest, exceed 30 times。This research reorganizes the free cash flow model, the price-earning ratio model and real-option model, and under the idea in these three kinds of different angles, appraises Taiwan Stock Exchange and Over the Counter market Biotechnology and Pharmacy industry. The evidence implies our real-option model can provide better valuation on Biotechnology and Pharmacy industry.
