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.

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 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.

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.”

When the MIT economist Andrew Lo came up with the concept of the hub-and-spoke model for the drug industry, it was to reduce the financial risk of developing drugs for rare forms of cancer.

VIDEO: Covid-19 may be a public health crisis, but has had real impacts on the economy. MIT’s Andrew Lo discusses what’s happened and why history suggests a financial boom may be in the future.

Biotechnologies born in the labs of MIT have been given priority review more often than other, similar life sciences innovations, according to a new study published in Nature Biotechnology.

We explore the science, scalability, and (of course) economics surrounding the global vaccine race. Guests include the chief medical officer of the first U.S. firm to go to Phase 3 trials with a vaccine candidate; a former F.D.A. commissioner who’s been warning of a pandemic for years; and an economist who thinks Covid-19 may finally change how diseases are cured.

How much should it cost the average American to get a COVID-19 vaccine shot in the arm? Although a vaccine is months away, if not longer, billions of tax dollars are spent to rapidly research, develop, manufacture and distribute several candidates. The federal government promised to make a vaccine free for people of low income. How many taxpayer dollars would enable everyone to get it without paying?