Current business models have struggled to support early-stage drug development. In this paper, we study an alternative financing model, the mega-fund structure, to fund drug discovery. We extend the framework proposed in previous studies to account for correlation between phase transitions in...

Hedge funds are often cited as attractive investments because of their diversification benefits and distinctive risk profiles - in contrast to traditional investments such as stocks and bonds, hedge-fund returns have more complex risk exposures that yield complementary sources of risk premia....

Biomedical innovation in oncology has become riskier and more expensive, precipitating a withdrawal of private sector funding from the sector. In this article, we consider a portfolio-based approach to funding in which multiple distinct ovarian cancer treatment candidates are funded within a...

During the week of August 6, 2007, a number of quantitative long/short equity hedge funds experienced unprecedented losses. It has been hypothesized that a coordinated deleveraging of similarly constructed portfolios caused this temporary dislocation in the market. Using the simulated returns of...

The biotechnology and pharmaceutical industries are facing significant challenges to their existing business models because of expiring drug patents, declining risk tolerance of venture capitalists and other investors, and increasing complexity in translational medicine. In response to these...

Using survey data gathered from grantees of the non-profit Breast Cancer Research Foundation (BCRF), we investigated the commercial and non-commercial impact of their research funding. We found significant impact in both domains. Commercially, 19.5% of BCRF grantees filed patents, 35.9% had a...

Advances in biomedical research have created significant opportunities to bring to market a new generation of therapeutics. However, early-stage assets often face a dearth of funding, as they have a high risk of failure and significant development costs. Historically, this has been particularly...

Duchenne muscular dystrophy (DMD) is a rare genetic disorder affecting thousands of individuals, mainly young males, worldwide. Currently, the disease has no cure, and is fatal in all cases. Advances in our understanding of the disease and innovations in basic science have recently allowed...

For investment projects with low probabilities of success, long time horizons, and large capital requirements, traditional financing sources such as private and public equity may not be ideal. Nevertheless, such projects may yield attractive risk-adjusted returns when combined into a single...

We define long shots as investment projects with four features: (1) low probabilities of success; (2) long gestation lags before any cash flows are realized; (3) large required up-front investments; and (4) very large payoffs (relative to initial investment) in the unlikely event of success....