Professor Andrew Lo and MIT colleagues, Jose-Maria Fernandez and Roger Stein, have proposed the creation of a $30bn “megafund” that would invest in early-stage biomedical research and drug development. Investing in as many as 150 experimental compounds at one time increases the chances that a few of the ventures will succeed, and generate enough profit to make up for those that fail. Prof Lo recently talked to the FT about his idea.
Andrew Lo, professor, hedge fund manager, and director of the financial engineering lab at MIT’s Sloane School of Management discusses how the financial markets can play a key role in solving the greatest global challenges. Including finding a cure for cancer.
MIT finance professor and hedge fund manager Andrew W. Lo has another idea about how to further the cause — by harnessing the power of financial wizardry. Lo wants to create a “megafund” that would raise billions of dollars for early-stage research in cancer drugs.
Economist and finance professor at M.I.T.'s Sloan School of Management, challenges a core idea of financial theory: that markets are "efficient," meaning there's no point in trying to time your moves in and out of stocks, since everything you could know about them is already baked into the price.
A “proof-of-concept” study applying financial portfolio theory to U.S. biomedical research funding shows that the nation’s health might gain the largest benefit by increasing funding on heart, lung, and blood diseases, and might gain the quickest benefit by increasing spending on mental illness research.
Translational research - the point at which general scientific knowledge starts to be applied to addressing a specific disease or condition - is the first step on the path to developing a new drug. But traditional investors in translational research (large- and medium-cap biopharmaceutical companies and life science-focused venture capital funds) are becoming increasingly risk averse in the face of escalating challenges in the drug development process. FasterCures recently hosted a Financial Innovations Lab to examine business models and financial instruments that can improve the risk/return ratio for early-stage investors. In this session you'll hear from experts who have designed and implemented new models like leveraged funds, research-based obligations and collaborative funding. If we can find a way to close the funding gap for translational research, we can get one step closer to urgently needed treatments.