So you just got a BTD for your top drug? Don't be surprised to see the enthusiasm fizzle fast among investors
We’ve already seen studies spotlighting how the FDA’s breakthrough therapy designation can lead doctors and patients to get unreasonably pumped about a drug — even though that was never the idea. But it seems that investors have become largely immune to the buzz, at best losing interest quickly.
How do we know?
A group of researchers took a list of 218 BTDs, sliced away the ex-US and private companies, and then tracked the stock reaction to the announcement. Dividing the list into commercial and pre-commercial outfits, they found that the more mature companies essentially saw no response in the ticker price. The less mature pre-commercial biotechs got a clear pop on their stock price, but that just lasted a few days and then quickly fizzled.
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