Skip to main content

A gene to drug venture: Poisson options analysis

Buy Article:

$43.00 plus tax (Refund Policy)

We provide a Poisson real option model of a gene‐to‐drug venture. First we describe a general new drug discovery programme as well as a specific secretory protein research programme. Then we model both the candidate secretory gene and the ‘hot’ gene discoveries as Poisson processes. Gene deal value sizes are modeled as lognormal distributions. Then we calculate the expected R&D value (EV) of the Poisson discoveries times the value distributions, for both stages. Finally, for generic collaborating‐funding arrangements, we show the Merton (1976) standard mixed diffusion‐jump option value, compared to a risk neutral ‘intrinsic’ value. Under simple assumptions, the real option value is substantial, even if there is no intrinsic value.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Original Article

Affiliations: Manchester Business School, UK

Publication date: 2001-04-01

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more