How does news affect biopharma stock prices?: An event study.

ABSTRACT: We investigate the impact of information on biopharmaceutical stock prices via an event study encompassing 503,107 news releases from 1,012 companies. We distinguish between pharmaceutical and biotechnology companies, and apply three asset pricing models to estimate their abnormal returns. Acquisition-related news yields the highest positive return, while drug-development setbacks trigger significant negative returns. We also find that biotechnology companies have larger means and standard deviations of abnormal returns, while the abnormal returns of pharmaceutical companies are influenced by more general financial news. To better understand the empirical properties of price movement dynamics, we regress abnormal returns on market capitalization and a sub-industry indicator variable to dis

SUBMITTER: Cho J 

PROVIDER: S-EPMC10817120 | biostudies-literature | 2024

REPOSITORIES: biostudies-literature