Public Investors

Public investors purchase stock in IPOs or follow-on rounds after the technical risk has declined and the stock is liquid. Some of these investors expect to make their return when important commercial milestones are achieved, i.e., positive Phase 3 results, FDA approval, or financial breakeven, usually within a few years. Other investors are momentum players who hope to buy the stock on an upswing and get out before investor enthusiasm wanes, often within several months. Still other speculators enjoy playing the high volatility of biotech stocks, hoping to make returns within several days. 

If the chain letter is successful, the end result is a profitable company valued on the basis of conventional investment criteria, i.e., price/eamings ratio. During the 15 to 20 years after formding that is typically required to achieve profitability, a biotech company will have had a constantly changing shareholder list. With the exception of a few visionary formders, these investors expect to make their money over relatively short hme frames. 

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In addition, we provide a method to deal with this asymmetry in the estimation of the underlying OHR. The asymmetric behaviour of returns and correlations among financial assets has been investigated by [2,9,13], as well as [1]. According to these publications, investors seem to respond more to negative shocks than the positive ones. Thus, the question is whether the issue of asymmetry matters in the... 

For most of the twentieth century, LDCs, either investor owned or municipally owned, have had exclusive rights or franchises to distribute gas in specified geographic areas. Regardless of ownership, LDCs are regulated, either by state public utility/service commissions or local government agencies, to assure adequate gas supply, dependable service and reasonable prices for consumers. 

Often the reason a given plant site is chosen is that special incentives have been offered by local authorities. In the mid-1960s, when money for financing was hard to obtain and interest rates were high, tax-free municipal bonds were an important lure. Tax-free means the investor does not need to pay taxes on his earnings. This means the bonds can be sold at lower interest rates and the company saves money. In 1967, 1,500,000,000 worth of these industrial bonds were issued. In 1968 the Department of Internal Revenue announced that in the future bonds used to finance private industry would be taxed regardless of who issued them. However, since then various loopholes have developed. Municipal bonds used to finance public projects such as schools, roads, and fire stations are still not taxed, since many communities would be unable to finance these projects at commercial interest rates. 

Investors, however, like companies that have large tangible assets, because they think they have a better chance of getting their money back should the company become bankrupt. The tangible assets are the undepreciated assets of the company. So if a company is interested in selling bonds, it looks better if it has depreciated its assets slowly. As a result, some companies keep dual books-one for the public and the other for the Internal Revenue Service. There is nothing illegal about this. The capitalized cost minus the amount that has been depreciated is called the book value of the asset. This may be above, below, or the same as its resale value. 

Conventional nuclear reactors and advanced breeder reactors were America s primary energy strategy since the 1950s to resolve the fossil fuel problem but when a reactor accident occurred in 1979 at Three Mile Island in Pennsylvania, public and investor confidence in nuclear fission dropped. The accident was triggered by the failure of a feedwater pump that supplied water to the steam generators. The backup feedwater pumps were not connected to the system as required, which caused the reactor to heat up. The safety valve then failed to act which allowed a radioactive water and gas leak. This was the worst nuclear power accident in the U.S., but in this accident no one was killed and no one was directly injured. At Three Mile Island faulty instrumentation gave incorrect readings for the... 

Surveys and interviews show that the attention paid to energy-efficiency investments in companies, public administrations and private households is often very low and heavily influenced by the priorities of those responsible for decision making (Ramesohl, 2000 Schmid, 2004 Stern, 1992). In other cases, project-based economic evaluations do not consider the relatively high transaction costs of the investor and also the substantial risks involved in the case of long-term investments both aspects may be decisive for small efficiency investments (Ostertag, 2003). 

The central issue in any stock offering is price. In traditional, profitable companies price is usually measured as a price/earnings ratio. Since biotech companies rarely are profitable, price is evaluated using the capitalized value of the outstanding stock, i.e., price per share times the total number of shares, compared to other companies at similar stages of development with comparable upside potential. This "market cap" number (either private or public) is what sophisticated biotech investors look to in measuring whether an offering price is fair. Two measures used are postmoney and premoney values. 

The plan will eventually prescribe a likely filing date for a marketing authorisation application (MAA) (product hcence). This date is vital and when the plan becomes public information, any slippage in the date is likely to impact on the share price of the company. Accordingly, senior members of the company must be confident that the date can be met. There will always be pressure to bring the date forward but this has a cost in resources, and risks damaging credibility with investors if the accelerated timelines cannot be met. 

Part of the apparent paradox stems from the industry s awkward position on the spectrum from publicly owned enterprise and pure private, investor-owned, and profit-driven enterprise. On the one hand, the pharmaceutical companies are structured as profit-seeking enterprises. Unlike many other profit-seeking industries, however, the research-based pharmaceutical industry cannot survive without government protection. 

This book provides an insider s perspective of the status of the fine-chemical industry, as well as its outlook. It covers all aspects of this dynamic industry, with all of its stakeholders in mind, viz. employees, customers, suppliers, investors, students and educators, media representatives, neighboring communities, public officials, and anyone else who has an interest in industrial context. Safety, health, environmental, and regulatory issues are discussed only briefly, as the related subjects are extensively covered in the specialized literature. 

Capital market inefficiencies exacerbate the problems caused by adverse selection. Because corporate income is doubly taxed, earnings are retained during good times rather than dispersed to shareholders. When the supply of insurance is tight and profits are high, external capital does not enter the industry in optimal amounts because, once it is in the corporate sector, capital is not easily transferred back to individuals without dividend taxation. Also, external and internal capital are not perfect substitutes because of the asymmetry of information. If investors believe the best financial opportunities are reserved for insiders, any attempt to raise public equity is a signal that few profits are available. 

The pharmaceutical industry has an important social contract with the public to discover and develop medicines that have value in extending and enhancing life. Simultaneously, the industry must maintain its profitability both to ensure the future stream of innovations and to provide investors with a return. Balancing the responsibilities to the public and to shareholders is further complicated by the inefficiencies of the global patent system, the disease burden of poor developing countries, national price control systems, and third-party payers. 

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