Risk and return in the biotech industry

IF 3.6 Q2 MANAGEMENT
Hassan Bruneo, Emanuela Giacomini, Giuliano Iannotta, Anant Murthy, Julien Patris
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引用次数: 0

Abstract

Purpose Biotech companies stand as key actors in pharmaceutical innovation. The high risk and long timelines inherent with their R&D investments might hinder their access to funding, potentially stifling innovation. This study aims to explore into the appeal of biotech companies to capital market investors, whose financial backing could bolster the growth of the biotechnology sector. Design/methodology/approach This paper uses a dataset of 774 US publicly listed biotech firms to investigate their risk and return characteristics by comparing them to pharmaceutical firms and a sample of matched non-biotech R&D-intensive firms over the sample period 1980–2021. Tests show that the conclusions remain consistent across diverse methodological approaches. Findings The paper shows that biotech companies are riskier than the average firm in the market index but outperform on a risk-adjusted basis both the market and a matched group of R&D-intensive firms. This is particularly true for large capitalization biotech, which is also shown to provide a diversification benefit by reducing the downside risk in past crisis periods. Originality/value This paper provides insight relevant to the current debate about the overall performance of the biotech industry in terms of policy changes and their impact on small, early-stage biotech firms. While small and early-stage biotech firms are playing an increasing role in scientific innovation, this study confirms their greater vulnerability to financial risks and the importance of access to capital markets in enabling those companies to survive and evolve into larger biotech.
生物技术行业的风险与回报
生物技术公司是制药创新的关键角色。他们的研发投资固有的高风险和长时间可能会阻碍他们获得资金,潜在地扼杀创新。本研究旨在探讨生物技术公司对资本市场投资者的吸引力,资本市场投资者的资金支持可以促进生物技术部门的增长。设计/方法/方法本文使用了774家美国上市生物技术公司的数据集,通过将它们与制药公司和匹配的非生物技术研发密集型公司的样本进行比较,研究了它们的风险和回报特征。试验表明,结论在不同的方法方法中保持一致。研究发现,生物技术公司在市场指数上的风险高于一般公司,但在风险调整的基础上,其表现优于市场和匹配的研发密集型公司。对于大型资本化的生物技术来说尤其如此,在过去的危机时期,生物技术也被证明可以通过降低下行风险来提供多样化的好处。本文从政策变化及其对小型、早期生物技术公司的影响的角度,提供了与当前关于生物技术行业整体表现的辩论相关的见解。虽然小型和早期的生物技术公司在科学创新中发挥着越来越大的作用,但这项研究证实了它们更容易受到金融风险的影响,以及进入资本市场对于使这些公司生存并发展成为更大的生物技术公司的重要性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
7.90
自引率
9.70%
发文量
87
期刊介绍: ■Organisational design and methods ■Performance management ■Performance measurement tools and techniques ■Process analysis, engineering and re-engineering ■Quality and business excellence management Articles can address these topics theoretically or empirically through either a descriptive or critical approach. The co-Editors support articles that significantly bring new knowledge to the area both for academics and practitioners. The material for publication in IJPPM should be written in a manner which makes it accessible to its entire wide-ranging readership. Submissions of highly technical or mathematically-oriented papers are discouraged.
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