Abstract
This thesis explores the pivotal role of U.S. Food and Drug Administration (FDA) regulatory designations; specifically Fast Track, Orphan Drug, Breakthrough Therapy, and Regenerative Medicine Advanced therapy as critical drivers of both economic and developmental outcomes for biotechnology companies. The research presented is organised across eight interrelated publications that investigate the pharmacoeconomic impact of these designations on early-stage, biotechnology firms. The primary objectives of the thesis are to: (1) evaluate the economic effects of FDA designations, particularly focusing on share price fluctuations, investor sentiment, and market valuation; (2) examine how these designations influence the drug development timeline, success rates, and the likelihood of regulatory approval; and (3) provide strategic insights into how biotechnology companies can leverage these regulatory milestones for both economic gain and the acceleration of novel therapies. Methodologically, the thesis employs an event-study framework, which is well-suited to analyse the short- and long-term impacts of regulatory announcements on stock performance. In addition, systematic reviews and meta-analyses are conducted to synthesise data, providing a broader understanding of the developmental outcomes associated with FDA designations. Share price data, benchmarked against U.S share price Indexes, are analysed to determine cumulative average abnormal returns post-designation. Key findings indicate that FDA designations consistently result in short-term stock price surges, with more varied long-term economic impacts. Companies receiving these designations experience positive investor sentiment, particularly around the time of announcement, which reflects reduced perceived regulatory risk. Developmentally, these designations expedite drug development and enhance the probability of market entry, although the outcomes vary by designation type and company size. Across the four studies, designation announcements generated cumulative abnormal returns ranging from 1.5% to 9.2%, while Breakthrough Therapy reduced median time-to-approval by 2.3 years compared with non-designatedcomparators. In conclusion, this body of work offers critical insights into the strategic value of FDA regulatory designations within the biotechnology industry, contributing both to the academic literature and providing practical guidance for biotech firms navigating the regulatory landscape.
| Date of Award | 3 Sept 2025 |
|---|---|
| Original language | English |
| Supervisor | Vijay Gc (Main Supervisor) & Syed Hasan (Co-Supervisor) |