IMPACT OF REGULATORY DECISIONS AFTER PHASE III CLINICAL TRIALS RELATING TO ONCOLOGY DRUGS ON PHARMACEUTICAL STOCK RETURNS

Open Access
Author:
Curotto, Andrew James
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Brian Davis, Thesis Supervisor
  • Brian Davis, Honors Advisor
  • Christoph Hinkelmann, Faculty Reader
Keywords:
  • pharmaceutical
  • event study
  • finance
  • clinical trials
  • stock returns
Abstract:
The aim of this paper is to identify the impact of public FDA announcements related to oncology drugs in Phase III clinical trials. By utilizing an event study methodology, the research will analyze Phase III news announcements, daily stock returns, and historical market capitalizations in order to test the impact of these factors against cumulative abnormal returns over a three-day event window. These abnormal returns will be compared to an expected return based on a market-adjusted beta calculated using each individual companies’ historical trading data. By further understanding the stock price movements of biopharmaceutical companies after Phase III results for their oncology drugs, investors will be able to construct more efficient portfolios after either positive or negative news announcements.