Do Public Announcements of Drug Development Events Influence a Drug Company's Market Value? A Study on Pfizer

藥品發展事件的公告對藥廠市場價值之影響？以輝瑞公司為例

10.6182/jlis.202206_20(1).049

曹喻涵(Yu-Han Tsao)；王俊傑(Chun-Chieh Wang)

Drug Development Process ； Event Study ； Pfizer ； 藥品發展歷程 ； 事件研究法 ； 輝瑞公司

圖書資訊學刊

20卷1期（2022 / 06 / 01）

49 - 67

英文

The circulation of money in the global pharmaceutical market is substantial and has been increasing annually. Moreover, the high requirements for new drugs and the procedures for verifying the quality of drugs are increasingly complex; thus, successful drug research and development are critical for drug companies. To identify fluctuations in stock prices during the drug research and development process, the event study model is adopted to capture abnormal returns in Pfizer stock resulting from the public announcement of various relevant events. The study aims to (a) examine whether events publicized by official databases or the media during drug research and development affect Pfizer's stock price; (b) examine whether these events affect the stock price of Pfizer's competitors; and (c) compare price fluctuations around the dates of these events. The event data are collected from official databases, including the US Food and Drug Administration's Orange Book; clinicaltrials.gov; Web of Science; and media sources, such as the Wall Street Journal. The collected data span from the first date in each data source to December 31, 2018. The results reveal that Pfizer's stock price is affected by drug approval dates and trial judgment dates prior to media reports. However, the stock prices of other competitors are not correlated with Pfizer's stock price. Notably, a time gap between reporting from the Wall Street Journal and other data sources is identified. The results of this study can be useful for investors in the global stock market and for pharmaceutical companies exploring resource allocation in drug research and development strategies.

全球藥品市場規模逐年增加，故藥品研發成功對藥廠至關重要。本研究採用事件研究法來探討輝瑞公司各類藥品發展事件的公告日前後股價異常收益。本研究目的（1）探討藥品發展事件在政府資料庫及大眾媒體報導等兩種公告日前後輝瑞公司股價波動，（2）檢視這些事件是否會影響輝瑞公司競爭對手的股價，以及（3）比較這些事件在公告日期前後的股價波動差異。研究結果顯示輝瑞公司的股價在媒體揭露獲得藥證和訴訟判決結果等事件前就已有顯著波動，但是其他競爭對手的股價不會與其連動。值得注意的是，大眾媒體的報導日期與政府資料庫的公告日期間存有時間差且股價波動也不同。本研究成果可作為股票投資時的判斷依據，以及藥品研發時的資源配置參考。

1. Abud, M. J.,Hall, B.,Helmers, C.(2015).An empirical analysis of primary and secondary pharmaceutical patents in Chile.PLoS ONE,10(4),Article e0124257.
2. Arundel, A.,Kabla, I.(1998).What percentage of innovations are patented? Empirical estimates for European firms.Research Policy,27(2),127-141.
3. Brown, S. J.,Warner, J. B.(1980).Measuring security price performance.Journal of Financial Economics,8(3),205-258.
4. Brown, S. J.,Warner, J. B.(1985).Using daily stock returns: The case of event studies.Journal of Financial Economics,14(1),3-31.
5. Bulow, J. I.,Geanakoplos, J. D.,Klemperer, P. D.(1985).Multimarket oligopoly: Strategic substitutes and complements.Journal of Political Economy,93(3),488-511.
6. Chen, Y.-S.,Chang, K.-C.(2010).The relationship between a firm’s patent quality and its market value—The case of US pharmaceutical industry.Technological Forecasting & Social Change,77(1),20-33.
7. Chong, C. R.,Sullivan, D. J., Jr.(2007).New uses for old drugs.Nature,448(7154),645-646.
8. Engelhardt, B.,Fernandes, Z.(2016).Economics Department Working PapersEconomics Department Working Papers,Department of Economics, College of the Holy Cross.
9. Filson, D.,Oweis, A.(2010).The impacts of the rise of Paragraph IV challenges on startup alliance formation and firm value in the pharmaceutical industry.Journal of Health Economics,29(4),575-584.
10. Gambardella, A.(1995).Science and innovation: The US pharmaceutical industry during the 1980s.Cambridge University Press.
11. Gao, Z., Hsu, P.-H., & Huh, S.-W. (2020). Competitors’ innovation and informed trading: Evidence from weekly patent announcements. SSRN. http://doi.org/10.2139/ssrn.2883233
12. Han, J.-S.,Lee, S.-Y. T.(2013).The impact of technology transfer contract on a firm’s market value in Korea.The Journal of Technology Transfer,38(5),651-674.
13. Hwang, T. J.(2013).Stock market returns and clinical trial results of investigational compounds: An event study analysis of large biopharmaceutical companies.PLoS ONE,8(8),e71966.
14. IQVIA Institute for Human Data Science. (2021).Global medicine spending and usage trends outlook to 2025. IQVIA Institute.
15. Kurov, A.,Sancetta, A.,Strasser, G.,Wolfe, M . H .(2019).Price drift before U S macroeconomic news: Private information about public announcements?.Journal of Financial & Quantitative Analysis,54(1),449-479.
16. Ledford, H.(2011).Blockbuster drug bows out: Pharmaceutical industry anxiously struggles to retool as Lipitor patent expires.Nature,480(7375),16-17.
17. Levin, R. C.,Klevorick, A. K.,Nelson, R. R.,Winter, S. G.(1987).Appropriating the returns from industrial research and development.Brookings papers on economic activity,1987(3),783-831.
18. Lichtenberg, F. R.(2005).The impact of new drug launches on longevity: Evidence from longitudinal, disease-level data from 52 countries, 1982–2001.International Journal of Health Care Finance & Economics,5(1),47-73.
19. Liu, Q.(2006).How good is good news? Technology depth, book-to-market ratio, and innovative events.Journal of Accounting, Auditing & Finance,21(3),293-321.
20. MacKinlay, A. C.(1997).Event studies in economics and finance.Journal of economic literature,35(1),13-39.
21. Mc Namara, P.,Baden-Fuller, C.(2007).Shareholder returns and the exploration–exploitation dilemma: R&D announcements by biotechnology firms.Research Policy,36(4),548-565.
22. Motohashi, K.(2007).The changing autarky pharmaceutical R&D process: Causes and consequences of growing R&D collaboration in Japanese firms.International Journal of Technology Management,39(1/2),33-48.
23. Nasdaq. (2021). Market value. https://www.nasdaq.com/glossary/m/market-value
24. Overgaard, C. B.,van den Broek, R. A.,Kim, J. H.,Detsky, A. S.(2000).Biotechnology stock prices before public announcements: Evidence of insider trading?.Journal of Investigative Medicine,48(2),118-124.
25. Panattoni, L. E.(2011).The effect of Paragraph IV decisions and generic entry before patent expiration on brand pharmaceutical firms.Journal of Health Economics,30(1),126-145.
26. Paul, S. M.,Mytelka, D. S.,Dunwiddie, C. T.,Persinger, C. C.,Munos, B. H.,Lindborg, S. R.,Schacht, A. L.(2010).How to improve R&D productivity: The pharmaceutical industry’s grand challenge.Nature Reviews Drug Discovery,9(3),203-214.
27. Pérez-Rodríguez, J. V.,Valcarcel, B. G. L.(2012).Do product innovation and news about the R&D process produce large price changes and overreaction? The case of pharmaceutical stock prices.Applied Economics,44(17),2217-2229.
28. Poitras, M.(2004).The impact of macroeconomic announcements on stock prices: In search of state dependence.Southern Economic Journal,70(3),549-565.
29. Rao, S. M.(1996).The effect of published reports of environmental pollution on stock prices.Journal of Financial & Strategic Decisions,9(1),25-32.
30. Rothenstein, J. M.,Tomlinson, G.,Tannock, I. F.,Detsky, A. S.(2011).Company stock prices before and after public announcements related to oncology drugs.Journal of the National Cancer Institute,103(20),1507-1512.
31. Sedighi, M.,Jahangirnia, H.,Gharakhani, M.,Farahani Fard, S.(2019).A novel hybrid model for stock price forecasting based on metaheuristics and support vector machine.Data,4(2),Article 75.
32. Sharma, A.,Lacey, N.(2004).Linking product development outcomes to market valuation of the firm: The case of the US pharmaceutical industry.Journal of Product Innovation Management,21(5),297-308.
33. Slovin, M. B.,Sushka, M. E.,Bendeck, Y. M.(1991).The intra-industry effects of goingprivate transactions.The Journal of Finance,46(4),1537-1550.
34. Stankevi č ienė, J,Akelaitis, S.(2014).Impact of public announcements on stock prices: The example of Lithuanian stock market considering values of stock prices.Economics & Business,26,107-112.
35. Sternitzke, C.(2010).Knowledge sources, patent protection, and commercialization of pharmaceutical innovations.Research Policy,39(6),810-821.
36. U.S. Food and Drug Administration. (2018). Step 3: Clinical research. https://www.fda.gov/patients/drug-development-process/step-3-clinical-research
37. U.S. Food and Drug Administration. (2020). Frequently asked questions on patents and exclusivity.https://www.fda.gov/drugs/development-approval-process-drugs/frequently-asked-questions-patents-and-exclusivity
38. U.S. Food and Drug Administration. (2015). FDA’s drug review process: Continued.https://www.fda.gov/drugs/information-consumers-and-patients-drugs/fdas-drug-review-process-continuedU.S. Food and Drug Administration. (2018). Step 3: Clinical research. https://www.fda.gov/patients/drug-development-process/step-3-clinical-research
39. Xu, B.(2006).R&D progress, stock price volatility, and post-announcement drift: An empirical investigation into biotech firms.Review of Quantitative Finance & Accounting,26(4),391-408.