Title |
Just how good an investment is the biopharmaceutical sector?
|
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Published in |
Nature Biotechnology, December 2017
|
DOI | 10.1038/nbt.4023 |
Pubmed ID | |
Authors |
Richard T Thakor, Nicholas Anaya, Yuwei Zhang, Christian Vilanilam, Kien Wei Siah, Chi Heem Wong, Andrew W Lo |
Abstract |
Uncertainty surrounding the risk and reward of investments in biopharmaceutical companies poses a challenge to those interested in funding such enterprises. Using data on publicly traded stocks, we track the performance of 1,066 biopharmaceutical companies from 1930 to 2015-the most comprehensive financial analysis of this sector to date. Our systematic exploration of methods for distinguishing biotech and pharmaceutical companies yields a dynamic, more accurate classification method. We find that the performance of the biotech sector is highly sensitive to the presence of a few outlier companies, and confirm that nearly all biotech companies are loss-making enterprises, exhibiting high stock volatility. In contrast, since 2000, pharmaceutical companies have become increasingly profitable, with risk-adjusted returns consistently outperforming the market. The performance of all biopharmaceutical companies is subject not only to factors arising from their drug pipelines (idiosyncratic risk), but also from general economic conditions (systematic risk). The risk associated with returns has profound implications both for patterns of investment and for funding innovation in biomedical R&D. |
X Demographics
Geographical breakdown
Country | Count | As % |
---|---|---|
United States | 13 | 25% |
United Kingdom | 5 | 10% |
France | 4 | 8% |
India | 3 | 6% |
Spain | 2 | 4% |
Australia | 2 | 4% |
Colombia | 2 | 4% |
Netherlands | 1 | 2% |
South Africa | 1 | 2% |
Other | 4 | 8% |
Unknown | 15 | 29% |
Demographic breakdown
Type | Count | As % |
---|---|---|
Members of the public | 35 | 67% |
Scientists | 12 | 23% |
Practitioners (doctors, other healthcare professionals) | 3 | 6% |
Science communicators (journalists, bloggers, editors) | 2 | 4% |
Mendeley readers
Geographical breakdown
Country | Count | As % |
---|---|---|
Unknown | 134 | 100% |
Demographic breakdown
Readers by professional status | Count | As % |
---|---|---|
Student > Ph. D. Student | 27 | 20% |
Student > Bachelor | 16 | 12% |
Researcher | 13 | 10% |
Student > Doctoral Student | 12 | 9% |
Student > Master | 11 | 8% |
Other | 28 | 21% |
Unknown | 27 | 20% |
Readers by discipline | Count | As % |
---|---|---|
Biochemistry, Genetics and Molecular Biology | 22 | 16% |
Economics, Econometrics and Finance | 16 | 12% |
Agricultural and Biological Sciences | 15 | 11% |
Medicine and Dentistry | 10 | 7% |
Business, Management and Accounting | 7 | 5% |
Other | 35 | 26% |
Unknown | 29 | 22% |