The purpose of this research is to investigate potential strategic variables that executives at small to mid-sized biopharmaceutical companies should consider during the period of a drug launch. Bringing a product to market is a critical event for any biopharmaceutical company. It marks a major turning point within the biopharmaceutical's lifecycle and the company that can successfully launch a product will be viewed as a different asset class. Therefore, it is critical to understand potential drivers of the value and to encourage executives to raise probing questions when they are considering the next round of financing or whether to provide guidance. This study analyzed forty-six non-generic, therapeutic drugs launched in the US during January 2000- December 2009 by small to mid-sized biopharmaceutical companies with market capitalizations less than $20 billion at the time of launch. Predictor variables that were initially considered in the analysis are the following: management providing a sales guidance (binary), partnership (binary), market size of the partner(s) at the time of launch, specialty/primary care indication (binary), difference between year two actual sales number and that of pre-launch estimate, difference between year two actual sales number and that of post-launch estimate, financing activity prior to launch (binary), financing activity after launch (binary), average prelaunch file-to-offer discount, average post-launch file-to-offer discount, number of drugs launched by the same company (control variable) and NBI performance (control variable). Multiple linear regression analyses were then performed to determine which of these parameters were predictive of changes in stock price and changes in market capitalization. Those companies that did not provide guidance at the time of launch and raised additional capital within two years after launch performed better than those that did otherwise. Neither a partnership nor the market size of the partner contributed to either of the outcome measures. Whether or not the product is a specialty product also did not make any significant contribution to the models. The results from this study suggest several possible strategic and actionable items that can guide management to ask the right questions during the period around a drug launch.
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