| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w23344 |
| 来源ID | Working Paper 23344 |
| Sharing R&D Risk in Healthcare via FDA Hedges | |
| Adam Jørring; Andrew W. Lo; Tomas J. Philipson; Manita Singh; Richard T. Thakor | |
| 发表日期 | 2017-05-01 |
| 出版年 | 2017 |
| 语种 | 英语 |
| 摘要 | The high cost of capital for firms conducting medical research and development (R&D) has been partly attributed to the government risk facing investors in medical innovation. This risk slows down medical innovation because investors must be compensated for it. We analyze new and simple financial instruments, Food and Drug Administration (FDA) hedges, to allow medical R&D investors to better share the pipeline risk associated with FDA approval with broader capital markets. Using historical FDA approval data, we discuss the pricing of FDA hedges and mechanisms under which they can be traded and estimate issuer returns from offering them. Using various unique data sources, we find that FDA approval risk has a low correlation across drug classes as well as with other assets and the overall market. We argue that this zero-beta property of scientific FDA risk could be a main source of gains from trade between issuers of FDA hedges looking for diversified investments and developers looking to offload the FDA approval risk. We offer proof of concept of the feasibility of trading this type of pipeline risk by examining related securities issued around mergers and acquisitions activity in the drug industry. Overall, our argument is that, by allowing better risk sharing between those investing in medical innovation and capital markets more generally, FDA hedges could ultimately spur medical innovation and improve the health of patients. |
| 主题 | Financial Economics ; Portfolio Selection and Asset Pricing ; Financial Markets ; Financial Institutions ; Corporate Finance ; Health, Education, and Welfare ; Health ; Other ; Law and Economics ; Industrial Organization ; Industry Studies ; Development and Growth ; Innovation and R& ; D |
| URL | https://www.nber.org/papers/w23344 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/581018 |
| 推荐引用方式 GB/T 7714 | Adam Jørring,Andrew W. Lo,Tomas J. Philipson,et al. Sharing R&D Risk in Healthcare via FDA Hedges. 2017. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w23344.pdf（735KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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