Financing translation: Analysis of the NCATS rare-diseases portfolio
The portfolio of the National Center for Advancing Translational Sciences (NCATS) rare-diseases therapeutic development program comprises 28 research projects initiated at the preclinical stage. Historical data reveal substantially lower costs and higher success rates but longer preclinical timeline...
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Association for the Advancement of Science (AAAS)
2015
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| Online Access: | http://hdl.handle.net/1721.1/99456 https://orcid.org/0000-0003-2944-7773 |
| _version_ | 1826213479877443584 |
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| author | Fagnan, David E. Yang, N. Nora McKew, John C. Lo, Andrew W |
| author2 | Massachusetts Institute of Technology. Computer Science and Artificial Intelligence Laboratory |
| author_facet | Massachusetts Institute of Technology. Computer Science and Artificial Intelligence Laboratory Fagnan, David E. Yang, N. Nora McKew, John C. Lo, Andrew W |
| author_sort | Fagnan, David E. |
| collection | MIT |
| description | The portfolio of the National Center for Advancing Translational Sciences (NCATS) rare-diseases therapeutic development program comprises 28 research projects initiated at the preclinical stage. Historical data reveal substantially lower costs and higher success rates but longer preclinical timelines for the NCATS projects relative to the industry averages for early-stage translational medical research and development (R&D) typically cited in literature. Here, we evaluate the potential risks and rewards of investing in a portfolio of rare-disease therapeutics. Using a “megafund” financing structure, NCATS data, and valuation estimates from a panel of industry experts, we simulate a hypothetical megafund in which senior and junior debt yielded 5 and 8%, respectively. The simulated expected return to equity was 14.7%, corresponding to a modified internal rate of return of 21.6%. These returns and the likelihood of private-sector funding can be enhanced through third-party funding guarantees from philanthropies, patient advocacy groups, and government agencies. |
| first_indexed | 2024-09-23T15:49:52Z |
| format | Article |
| id | mit-1721.1/99456 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T15:49:52Z |
| publishDate | 2015 |
| publisher | American Association for the Advancement of Science (AAAS) |
| record_format | dspace |
| spelling | mit-1721.1/994562023-03-01T02:14:40Z Financing translation: Analysis of the NCATS rare-diseases portfolio Fagnan, David E. Yang, N. Nora McKew, John C. Lo, Andrew W Massachusetts Institute of Technology. Computer Science and Artificial Intelligence Laboratory Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science Massachusetts Institute of Technology. Operations Research Center Sloan School of Management Lo, Andrew W. Fagnan, David E. Lo, Andrew W. The portfolio of the National Center for Advancing Translational Sciences (NCATS) rare-diseases therapeutic development program comprises 28 research projects initiated at the preclinical stage. Historical data reveal substantially lower costs and higher success rates but longer preclinical timelines for the NCATS projects relative to the industry averages for early-stage translational medical research and development (R&D) typically cited in literature. Here, we evaluate the potential risks and rewards of investing in a portfolio of rare-disease therapeutics. Using a “megafund” financing structure, NCATS data, and valuation estimates from a panel of industry experts, we simulate a hypothetical megafund in which senior and junior debt yielded 5 and 8%, respectively. The simulated expected return to equity was 14.7%, corresponding to a modified internal rate of return of 21.6%. These returns and the likelihood of private-sector funding can be enhanced through third-party funding guarantees from philanthropies, patient advocacy groups, and government agencies. MIT Laboratory for Financial Engineering National Institutes of Health (U.S.). Intramural Research Program National Institutes of Health (U.S.). National Center for Advancing Translational Sciences 2015-10-26T16:46:38Z 2015-10-26T16:46:38Z 2015-02 Article http://purl.org/eprint/type/JournalArticle 1946-6234 1946-6242 http://hdl.handle.net/1721.1/99456 Fagnan, D. E., N. N. Yang, J. C. McKew, and A. W. Lo. “Financing Translation: Analysis of the NCATS Rare-Diseases Portfolio.” Science Translational Medicine 7, no. 276 (February 25, 2015): 276ps3–276ps3. https://orcid.org/0000-0003-2944-7773 en_US http://dx.doi.org/10.1126/scitranslmed.aaa2360 Science Translational Medicine Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/octet-stream American Association for the Advancement of Science (AAAS) Prof. Lo via Shikha Sharma |
| spellingShingle | Fagnan, David E. Yang, N. Nora McKew, John C. Lo, Andrew W Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title | Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title_full | Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title_fullStr | Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title_full_unstemmed | Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title_short | Financing translation: Analysis of the NCATS rare-diseases portfolio |
| title_sort | financing translation analysis of the ncats rare diseases portfolio |
| url | http://hdl.handle.net/1721.1/99456 https://orcid.org/0000-0003-2944-7773 |
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