The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis
<jats:p>We perform an event study analysis that quantifies the market reaction to clinical trial result announcements for 13,807 trials from 2000 to 2020, one of the largest event studies of clinical trials to date. We first determine the specific dates in the clinical trial process on which t...
| Main Authors: | , , , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2022
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| Online Access: | https://hdl.handle.net/1721.1/145513 |
| _version_ | 1826203337251356672 |
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| author | Singh, Manish Rocafort, Roland Cai, Cathy Siah, Kien Wei Lo, Andrew W |
| author2 | Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science |
| author_facet | Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science Singh, Manish Rocafort, Roland Cai, Cathy Siah, Kien Wei Lo, Andrew W |
| author_sort | Singh, Manish |
| collection | MIT |
| description | <jats:p>We perform an event study analysis that quantifies the market reaction to clinical trial result announcements for 13,807 trials from 2000 to 2020, one of the largest event studies of clinical trials to date. We first determine the specific dates in the clinical trial process on which the greatest impact on the stock prices of their sponsor companies occur. We then analyze the relationship between the abnormal returns observed on these dates due to the clinical trial outcome and the properties of the trial, such as its phase, target accrual, design category, and disease and sponsor company type (biotechnology or pharmaceutical). We find that the classification of a company as “early biotechnology” or “big pharmaceutical” had the most impact on abnormal returns, followed by properties such as disease, outcome, the phase of the clinical trial, and target accrual. We also find that these properties and classifications by themselves were insufficient to explain the variation in excess returns observed due to clinical trial outcomes.</jats:p> |
| first_indexed | 2024-09-23T12:35:22Z |
| format | Article |
| id | mit-1721.1/145513 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T12:35:22Z |
| publishDate | 2022 |
| publisher | Public Library of Science (PLoS) |
| record_format | dspace |
| spelling | mit-1721.1/1455132022-09-28T08:49:15Z The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis Singh, Manish Rocafort, Roland Cai, Cathy Siah, Kien Wei Lo, Andrew W Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science Sloan School of Management. Laboratory for Financial Engineering Sloan School of Management Massachusetts Institute of Technology. Computer Science and Artificial Intelligence Laboratory <jats:p>We perform an event study analysis that quantifies the market reaction to clinical trial result announcements for 13,807 trials from 2000 to 2020, one of the largest event studies of clinical trials to date. We first determine the specific dates in the clinical trial process on which the greatest impact on the stock prices of their sponsor companies occur. We then analyze the relationship between the abnormal returns observed on these dates due to the clinical trial outcome and the properties of the trial, such as its phase, target accrual, design category, and disease and sponsor company type (biotechnology or pharmaceutical). We find that the classification of a company as “early biotechnology” or “big pharmaceutical” had the most impact on abnormal returns, followed by properties such as disease, outcome, the phase of the clinical trial, and target accrual. We also find that these properties and classifications by themselves were insufficient to explain the variation in excess returns observed due to clinical trial outcomes.</jats:p> 2022-09-20T12:41:15Z 2022-09-20T12:41:15Z 2022 2022-09-20T12:22:49Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/145513 Singh, Manish, Rocafort, Roland, Cai, Cathy, Siah, Kien Wei and Lo, Andrew W. 2022. "The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis." PLOS ONE, 17 (9). en 10.1371/journal.pone.0272851 PLOS ONE Creative Commons Attribution 4.0 International license https://creativecommons.org/licenses/by/4.0/ application/pdf Public Library of Science (PLoS) PLoS |
| spellingShingle | Singh, Manish Rocafort, Roland Cai, Cathy Siah, Kien Wei Lo, Andrew W The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title | The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title_full | The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title_fullStr | The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title_full_unstemmed | The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title_short | The reaction of sponsor stock prices to clinical trial outcomes: An event study analysis |
| title_sort | reaction of sponsor stock prices to clinical trial outcomes an event study analysis |
| url | https://hdl.handle.net/1721.1/145513 |
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