Biotech Values

[Tim Fowler]

Nominal - Cut in number of dollars, not adjusted for inflation.

Real - Adjusted for inflation.

Cut based on what was planned - Difference between planned future increases, and actual increases. (I personally would not consider this a cut, but many people call it that.)

If the budget is 100 in year one, its planned to go to 110 in year two, but things change and the budget stays the same at 100, and inflation is 5%

In nominal terms there is no cut. In real terms there is about a 4.8% cut (many people would say 5%, but 100 is about 95.238% of 105). But at the same time many people would talk about a cut of 9% (100/110 is .90909...) or even 10% (because 110 is 10% more than 100, even if 100 isn't 10% less than 110).

Tim