EconPapers    
Economics at your fingertips  
 

Orphan Drug Designations as Valuable Intangible Assets for IPO Investors in Pharma-Biotech Companies

Philippe Gorry and Diego Useche ()

No 24021, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Orphan Drug (OD) legislation has been implemented with regulatory and financial incentives to encourage drug innovation in order to treat rare diseases. This study aims to test whether OD Designations (ODD) granted by the Food and Drug Administration (FDA) to pharmaceutical and biotechnology start-up companies may be considered as relevant signals in attracting entrepreneurial finance and increasing the amount invested at the time of the Initial Public Offering (IPO) in the US stock markets. We found that the signaling power of ODD is positively and statistically significant for IPO investors in stock markets. Regression results also suggest that ODDs are stronger than patent applications in attracting IPO investors. Scholarly and policy implications are discussed in the light of the signaling theory and drug development policies.

JEL-codes: G11 G24 I1 L65 O32 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea
Date: 2017-11
Note: HE PR
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w24021.pdf (application/pdf)

Related works:
Chapter: Orphan Drug Designations as Valuable Intangible Assets for IPO Investors in Pharma-Biotech Companies (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24021

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24021

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2019-06-08
Handle: RePEc:nbr:nberwo:24021