scholarly journals Valuing biotechnology companies: Does classification by technology type help?

2008 ◽  
Vol 14 (2) ◽  
Author(s):  
Jacqueline Loh ◽  
Robert Brooks
Keyword(s):  
Risk Adjustment ◽  
Risk Measures ◽  
Financial Ratios ◽  
Superior Performance ◽  
Portfolio Construction ◽  
Financial Measures ◽  
Technology Platforms ◽  
Biotechnology Companies ◽  
Biotechnology Sector ◽  
Technology Type

This paper explores whether conventional financial ratios can be used for portfolio construction in the biotechnology sector after the companies are classified into groups based on technology platforms such as DNA, biochemistry and bioprocessing technologies. We find some success in the use of financial measures after the classification is made indicating that they do a better job when comparing like firms. Appropriate risk adjustment is, however, critical to determining if superior performance is attained. This remains a challenge due to the difficulties in finding appropriate risk measures for the sector.

Fundamentals-Based Risk Measurement in Valuation

2009 ◽  
Vol 84 (6) ◽  
pp. 1983-2011 ◽  
Author(s):  
Alexander Nekrasov ◽  
Pervin K. Shroff
Keyword(s):  
Risk Adjustment ◽  
Factor Model ◽  
Risk Measures ◽  
Risk Measure ◽  
Cost Of Equity ◽  
Valuation Model ◽  
Residual Income Valuation ◽  
Out Of Sample ◽  
Growth Stocks ◽  
Market Factors

ABSTRACT: We propose a methodology to incorporate risk measures based on economic fundamentals directly into the valuation model. Fundamentals-based risk adjustment in the residual income valuation model is captured by the covariance of ROE with market-wide factors. We demonstrate a method of estimating covariance risk out of sample based on the accounting beta and betas of size and book-to-market factors in earnings. We show how the covariance risk estimate can be transformed to obtain the fundamentals-based cost of equity. Our empirical analysis shows that value estimates based on fundamental risk adjustment produce significantly smaller deviations from price relative to the CAPM or the Fama-French three-factor model. We further find that our single-factor risk measure, based on the accounting beta alone, captures aspects of risk that are indicated by the book-to-market factor, largely accounting for the “mispricing” of value and growth stocks. Our study highlights the usefulness of accounting numbers in pricing risk beyond their role as trackers of returns-based measures of risk.

scholarly journals Diffusion of knowledge in the biotechnology sector

2018 ◽  
Vol 44 ◽  
pp. 00125
Author(s):  
Małgorzata Niklewicz-Pijaczyńska
Keyword(s):  
Dominant Role ◽  
Innovation Process ◽  
Innovation Activity ◽  
Technical Documentation ◽  
Diffusion Of Knowledge ◽  
The Us ◽  
Biotechnology Companies ◽  
High Degree ◽  
Biotechnology Sector ◽  
Biotechnological Inventions

The aim of the paper is to analyze the use of existing legally protected solutions an. publications made available through patent systems for the development of further biotechnological inventions. For its implementation, was conducted research based on the so-called patent citations of two kinds - to literature and previously published, other patents. For the needs of the paper, technical documentation of 88 patents in the resources of the Polish Patent Office and Espacenet was analyzed. The study includes 40 Polish biotechnology companies with significant innovation activity. The results of the conducted research allow to formulate two conclusions. First, the knowledge obtained from patent resources plays an important role in the innovation process of inventions in the biotechnology sector. Secondly, this knowledge is characterized by a high degree of internationalization, first of all are cited foreign inventions and source literature, domestic citations appear relatively rarely. Among observed references, citing American achievements plays a dominant role – this applies to both literature and inventions, which suggests that the US patent system is the main source of patent knowledge for Polish biotechnology companies.

scholarly journals Trends of industry-leading biotechnology stocks during COVID-19

2021 ◽  
Vol 10 (3) ◽  
Author(s):  
Navia Zhang ◽  
Meredith Haskins
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Blood Clotting ◽  
New Technologies ◽  
Share Prices ◽  
The World ◽  
Biotechnology Companies ◽  
Pandemic Vaccine ◽  
Biotechnology Sector ◽  
Roll Out

The 2019-nCoV coronavirus has significantly impacted the macroeconomic outlook for countries across the world. The biotechnology sector experienced a relatively positive stock price outlook, which corroborates the trends exhibited by biotechnology stocks in previous pandemics such as SARS (2003) and AH1N1 (2009). During the COVID-19 pandemic, vaccine roll-out rates have been more efficient than in any other pandemic, as companies today are more experienced in combating the time constraint to create vaccines. Gilead Sciences Inc. saw its shares rise 18% after developing the first FDA-approved COVID-19 vaccine, 'remdesivir'. In contrast, AstraZeneca's shares fell 2.28% in 2021 after its vaccine underwent investigations into blood-clotting side effects and subsequent suspension from several countries. Companies developing mRNA vaccines like Moderna, BioNTech, and Pfizer witnessed surges in share prices ranging from 10% to 20%. Many newer biotech companies such as Genexie, Sanovi, OnoSec, and Vaxart have also developed vaccines for COVID-19. Share prices are more volatile for these less established companies. This paper observes how developing new technologies, staging clinical trials, obtaining FDA approvals, gaining publicity, and several other complex factors have profound impacts on the stock prices of these biotechnology companies.

Dimensions of organisational innovativeness and company financial performance in the biotechnology sector

2019 ◽  
Vol 40 (6) ◽  
pp. 1110-1130 ◽  
Author(s):  
Krista Jaakson ◽  
Hannele-Marianne Aljaste ◽  
Piia Uusi-Kakkuri
Keyword(s):  
Financial Performance ◽  
Human Resource ◽  
Statistical Tests ◽  
Qualitative Comparative Analysis ◽  
Small Sample ◽  
Content Type ◽  
Human Resource Policies ◽  
Biotechnology Companies ◽  
Biotechnology Sector ◽  
Pharmaceutical Biotechnology

Purpose The relationship between organisational innovativeness (OI) and company performance has been studied extensively, and the associations found have mostly been positive. However, as OI is a multidimensional concept, more nuanced research is needed to identify which dimensions of innovativeness companies should focus on. The purpose of this paper is to longitudinally investigate the links between dimensions of OI and company financial performance, based on a sample of Finnish and Estonian pharmaceutical biotechnology companies. Design/methodology/approach Interviews inquiring about OI were conducted in 26 biotechnology companies and then their performance was measured over three subsequent years using objective financial data. Due to limited sample size, qualitative comparative analysis is employed in addition to non-parametric statistical tests. Findings Overall, OI did not decisively influence financial performance in the studied sector. There were, however, dimensions related to human resource policies that appeared to have more potential to positively impact financial performance, whereas the strategic dimension was actually aversive to certain performance indicators. Research limitations/implications The study limitations are a small sample, possible managerial bias in the assessment of OI, and focus on financial measures only. Practical implications The study demonstrates that OI is a multidimensional construct and not all dimensions play an equal role in financial performance. Innovation-supportive human resource policies and strategic flexibility contributes to financial performance in the pharmaceutical biotechnology sector. Originality/value The contribution of the study is the analysis of a specific sector with a longitudinal approach by bridging quantitative and qualitative approach.

A LIQUIDATION RISK ADJUSTMENT FOR VALUE AT RISK AND EXPECTED SHORTFALL

2018 ◽  
Vol 21 (03) ◽  
pp. 1850010 ◽  
Author(s):  
LAKSHITHE WAGALATH ◽  
JORGE P. ZUBELLI
Keyword(s):  
At Risk ◽  
Financial Institutions ◽  
Risk Adjustment ◽  
Value At Risk ◽  
Financial Institution ◽  
Risk Measures ◽  
Risk Measure ◽  
Expected Shortfall ◽  
Adjusted Risk ◽  
Risk Managers

This paper proposes an intuitive and flexible framework to quantify liquidation risk for financial institutions. We develop a model where the “fundamental” dynamics of assets is modified by price impacts from fund liquidations. We characterize mathematically the liquidation schedule of financial institutions and study in detail the fire sales resulting endogenously from margin constraints when a financial institution trades through an exchange. Our study enables to obtain tractable formulas for the value at risk and expected shortfall of a financial institution in the presence of fund liquidation. In particular, we find an additive decomposition for liquidation-adjusted risk measures. We show that such a measure can be expressed as a “fundamental” risk measure plus a liquidation risk adjustment that is proportional to the size of fund positions as a fraction of asset market depths. Our results can be used by risk managers in financial institutions to tackle liquidity events arising from fund liquidations better and adjust their portfolio allocations to liquidation risk more accurately.

Biotechnology in India: Emerging opportunities

2005 ◽  
Vol 12 (1) ◽  
Author(s):  
Himanshu Parmar
Keyword(s):  
Information Technology ◽  
Pharmaceutical Industry ◽  
Emerging Markets ◽  
Low Cost ◽  
International Community ◽  
The West ◽  
Biotechnology Companies ◽  
The Government ◽  
Biotechnology Sector

The global biotechnology and pharmaceutical industry is beleaguered with several challenges such as high R&D costs, increasing regulatory restraints and stagnant product pipelines. Thus, major multinational pharmaceutical and biotechnology companies from the West are increasingly looking for low-cost suitable alternatives. Among the emerging markets, India is seen as a low-cost destination with ample opportunities available to be capitalised on without compromising on the quality. To complement the interest from international community, India is also liberalising its economy and offering increasing opportunities to invest, along with other several reforms undertaken by the government. After information technology (IT), the focus is now on biotechnology in India, as is evident with the release of recent draft of the Biotechnology Policy 2005. This paper offer insights into India's biotechnology sector and opportunities.

Russia-Focused Venture Capital Supports In-Bound Technology Transfer and Company Building: An Analysis of Investment Trends and Outcomes

2014 ◽  
Vol 20 (1) ◽  
Author(s):  
John M. Garvey ◽  
Shann Kerner ◽  
Axel Tillmann ◽  
Dmitry Kuzmin
Keyword(s):  
Technology Transfer ◽  
Venture Capital ◽  
Early Stage ◽  
Clinical Stage ◽  
Trade Surplus ◽  
Russian Government ◽  
Investment Funds ◽  
Biotechnology Companies ◽  
Biotechnology Sector

This paper analyzes the approaches taken by the Russian government to promote innovation in the biotechnology sector within the country.  Russia is economically strong, currently with a trade surplus, and the country is investing broadly in initiatives that have resulted in in-bound technology transfer, as well as an expansion of the private sector.  These initiatives include government venture capital and investment funds, as well as physical technology “incubator” centers.  The result has been an increase in the number of clinical-stage biotechnology companies operating in Russia, as well as an increase in the number of pharmaceutical candidates undergoing trials in the country.  The biotechnology “boom” has also resulted in an increase in the number of early-stage companies.  This paper investigates current deal and investment trends from the funds that are the principal supporters of biotechnology companies in Russia.

scholarly journals RM-CVaR: Regularized Multiple β-CVaR Portfolio

2020 ◽  
Author(s):  
Kei Nakagawa ◽  
Shuhei Noma ◽  
Masaya Abe
Keyword(s):  
Portfolio Optimization ◽  
Value At Risk ◽  
Optimization Problems ◽  
Risk Measures ◽  
Risk Measure ◽  
Superior Performance ◽  
Conditional Value At Risk ◽  
Related Risk ◽  
Mean And Variance ◽  
Portfolio Optimization Problem

The problem of finding the optimal portfolio for investors is called the portfolio optimization problem. Such problem mainly concerns the expectation and variability of return (i.e., mean and variance). Although the variance would be the most fundamental risk measure to be minimized, it has several drawbacks. Conditional Value-at-Risk (CVaR) is a relatively new risk measure that addresses some of the shortcomings of well-known variance-related risk measures, and because of its computational efficiencies, it has gained popularity. CVaR is defined as the expected value of the loss that occurs beyond a certain probability level (β). However, portfolio optimization problems that use CVaR as a risk measure are formulated with a single β and may output significantly different portfolios depending on how the β is selected. We confirm even small changes in β can result in huge changes in the whole portfolio structure. In order to improve this problem, we propose RM-CVaR: Regularized Multiple β-CVaR Portfolio. We perform experiments on well-known benchmarks to evaluate the proposed portfolio. Compared with various portfolios, RM-CVaR demonstrates a superior performance of having both higher risk-adjusted returns and lower maximum drawdown.

scholarly journals Financial Performance of Investment Banks: A Comparison

2014 ◽  
Vol 1 (4) ◽  
pp. 14-17
Author(s):  
Raja Ahmed Jamil ◽  
Ihsan Ilahi ◽  
Sibtain Kazmi
Keyword(s):  
Economic Development ◽  
Financial Performance ◽  
Credit Rating ◽  
Investment Banks ◽  
Financial Ratios ◽  
Return On Assets ◽  
Financial Measures ◽  
Return On Equity ◽  
Huge Impact ◽  
Equity Ratio

Investment banks are the most important contributors in the economic development of a country. And they offer huge impact on capital and credit markets of the country. This study compared the financial performance of top ten investment banks on the basis of credit rating in 2014 for the period of 2009 to 2013. Financial ratios and financial measures were taken for the said purpose. Financial measures were based upon two indicators total asset and total equity. Financial ratios included return on assets ratio (ROA), return on Equity ratio (ROE), Admin Expenses to Profit before Tax Ratio, Cash and Cash Equivalent to Total Assets Ratio, and capital ratio. This study concluded that ranking of banks differs as the financial ratios change. 

scholarly journals DETERMINANTES DE LAS CAPACIDADES DE INNOVACIÓN EN EL SECTOR BIOTECNOLÓGICO EN MÉXICO

2019 ◽  
Vol 78 (307) ◽  
pp. 90 ◽  
Author(s):  
Mario Alberto Morales Sánchez ◽  
Héctor Eduardo Díaz Rodríguez
Keyword(s):  
Technological Innovation ◽  
Financial Knowledge ◽  
Determining Factors ◽  
Biotechnology Companies ◽  
Knowledge Collaboration ◽  
Biotechnology Sector ◽  
The Way

<p align="center"> <strong>RESUMEN</strong></p><p>La innovación tecnológica es un proceso ligado a la generación de conocimiento y la manera en la que las empresas aprenden y desarrollan innovaciones depende del contexto particular en el que se desenvuelven. Dado el potencial de diseminación que la biotecnología tiene y, por tanto, su capacidad para apuntalar una oleada de crecimiento en otros sectores, el presente estudio se centra en conocer y medir las capacidades de innovación, así como sus factores determinantes en empresas biotecnológicas mexicanas. Los resultados muestran que la existencia de redes (financieras, de conocimiento, de colaboración, entre otras) que permitan generar un flujo adecuado de conocimiento, así como de capacidades de las empresas para aprovecharlo, son factores determinantes del dinamismo innovador.</p><p> </p><p align="center"><strong>DETERMINANTS OF INNOVATION ABILITIES IN MEXICO’S BIOTECHNOLOGY SECTOR</strong></p><p align="center"><strong>ABSTRACT</strong></p>Technological innovation is a process linked to the generation of knowledge and the way in which companies learn and develop innovations. It depends on the particular context in which firms operate. As the potential of biotechnology has to support a wave of growth in other sectors, this study focuses on identifying and measuring innovation capabilities, as well as the determinants of such capabilities in the Mexican biotechnology companies. The results show that the existence of networks (financial, knowledge, collaboration, among others) that allow generating both an adequate flow of knowledge and the capacities of companies to take advantage of such knowledge, are determining factors of the innovative dynamism.

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