In a bid to overcome some of the commercial challenges faced by expensive new gene therapies, Quantile Health has raised $6 million for a financial platform that’s designed to spread out costs and widen access.

The company was co-founded by MIT professor Andrew Lo, whose ideas formed the intellectual foundation for the company BridgeBio, as part of his quest to change how drug development is financed.

An event study by Professor Andrew W. Lo, research affiliate Manish Singh, and co-author, shows that acquisition, product development, investment, regulation, earnings guidance, and analyst ratings significantly impact the stock prices of biopharmaceutical companies.

Professor Andrew Lo proposed a $30bn cancer "megafund" a decade ago to combine drug testing projects to diversify risk. The idea had already inspired smaller-scale applications at companies such as BridgeBio and Roivant, he said. "If we can change the incentives and reduce risk, the increased reward will bring more money," Lo said.

The study of finance can easily be split into two eras: before and after Harry Markowitz. The economist, who died on June 22, was one of the first academics to introduce abstract mathematical concepts to investment decision-making. "Everyone knew about diversification — not putting all your eggs in one basket," said professor Andrew W. Lo. "But Markowitz told us more than that. He told us how many eggs we should put in the different baskets, and how to diversify in a systematic way."

To crack the top five, Moderna will have to transition from a research-focused business to a multidrug commercial company without losing its science edge, said [professor] Andrew Lo. Only a handful of biotechs have successfully executed that maneuver, he said, citing the risk of setbacks in the lab and supply chains — all under the gaze of profit-minded investors. "In the parlance of Wall Street, it's always, 'What have you done for me now?' They've got a really large pipeline of interesting therapeutics. So the world is waiting to see what's next."

Prof. Andrew W. Lo says: "Even if a particular drug program is likely to be successful, and even if it generates a couple hundred million dollars a year in revenue, that might not be enough to justify putting the resources of the company to that drug because the same resources can be developing a billion dollar a year drug."

Prof. Andrew W. Lo says: "Very often when you're focusing on just one disease, by itself, it may not be economical to develop the particular therapeutic. But if you combine multiple diseases into a single financial portfolio, all of a sudden the risk-reward trade off becomes more attractive. If you can put together a large number of projects that are statistically independent — that their success and failure have no bearing on the other successes and failures — that's the best way of reducing risk in a portfolio."

In a 2021 study, for instance, three academics including [Prof.] Andrew Lo looked at what happened to innovation when drug companies were no longer able to resort to one of their favorite tactics: paying generic makers to stay off the market, known as "pay-for-delay." A 2013 Supreme Court ruling had essentially barred such agreements. What the researchers found was that companies actually responded by increasing their research and development spending to find new drugs.

New research published in the inaugural issue of the academic journal Collective Intelligence suggests that evolutionary forces may be fueling collective tendencies to discriminate.

New MIT research forecasts the effect of various two-dose vaccine allocation strategies on the cumulative number of infections and deaths in the U.S.—quantifying the impact of prioritizing first versus second doses. The forecasts suggest that allocating more than 50% of available doses to individuals who have not received their first dose can significantly increase the number of lives saved and significantly reduce the number of COVID-19 infections.

Retirement investors have never had it so good. For a decade now individual retirement accounts and company 401(k) plans have been booming thanks to the stock market’s giddy rise.

But before we start to get complacent, or think this is normal, here comes a timely new warning. And it comes from beyond the grave, from the late, great Vanguard founder Jack Bogle—one of the champions of the Mom and Pop investor and buy-and-hold index investing. Bogle died in 2019.

The typical life cycle of a drug from the laboratory to the clinic and, finally, to patients is long and fraught with obstacles. There is a significant bottleneck — known as the Valley of Death — when lack of funding prevents ideas from moving from the university into the market.

Andrew W. Lo is an economist by training and trade. While studying the drug discovery cycle for personal reasons, he was baffled by the concept of the Valley of Death. From the perspective of an economist, as he explains, “I always assumed that if there’s a medical need and if there’s a good rate of return for treating it, the money will flow. So, if there’s a bottleneck, it must mean that there just aren’t enough good opportunities.”