Profitability and Market Value of Orphan Drug Companies: A Retrospective, Propensity-Matched Case-Control Study.

ABSTRACT:

Background

Concerns about the high cost of orphan drugs has led to questions being asked about the generosity of the incentives for development, and associated company profits.

Methods

We conducted a retrospective, propensity score matched study of publicly-listed orphan companies. Cases were defined as holders of orphan drug market authorisation in Europe or the USA between 2000-12. Control companies were selected based on their propensity for being orphan drug market authorisation holders. We applied system General Method of Moments to test whether companies with orphan drug market authorization are valued higher, as measured by the Tobin's Q and market to book value ratios, and are more profitable based on return on assets, than non-orphan drug companies.

Results

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SUBMITTER: Hughes DA 

PROVIDER: S-EPMC5074462 | biostudies-literature | 2016

REPOSITORIES: biostudies-literature