The Complementary Relationship between Financial and Non-Financial Information in the Biotechnology Industry and the Degree of Investor Sophistication

We examine whether financial and non-financial variables, separately and in tandem, are value relevant in explaining market returns, equity values and the degree of investment by sophisticated investors for a sample of drug development companies. Patent counts, number of collaborations and probability-adjusted portfolios of drugs under development are the non-financial information metrics used in this study. Earnings are the main financial information variable. We show that news about these non-financial measures is significantly associated with abnormal returns. We also find that earnings are value relevant in explaining cumulative abnormal returns and equity prices around earnings announcement dates despite the fact that R&D expenditures are large and usually expensed as incurred. We further show that non-financial information is value relevant in explaining annual returns, equity prices and degree of investment by (long-horizon) sophisticated investors. Moreover, non-financial variables are value relevant after controlling for financial variables suggesting that the two types of variables are complements

Dysregulated metabolism contributes to oncogenesis.

Cancer is a disease characterized by unrestrained cellular proliferation. In order to sustain growth, cancer cells undergo a complex metabolic rearrangement characterized by changes in metabolic pathways involved in energy production and biosynthetic processes. The relevance of the metabolic transformation of cancer cells has been recently included in the updated version of the review "Hallmarks of Cancer", where dysregulation of cellular metabolism was included as an emerging hallmark. While several lines of evidence suggest that metabolic rewiring is orchestrated by the concerted action of oncogenes and tumor suppressor genes, in some circumstances altered metabolism can play a primary role in oncogenesis. Recently, mutations of cytosolic and mitochondrial enzymes involved in key metabolic pathways have been associated with hereditary and sporadic forms of cancer. Together, these results demonstrate that aberrant metabolism, once seen just as an epiphenomenon of oncogenic reprogramming, plays a key role in oncogenesis with the power to control both genetic and epigenetic events in cells. In this review, we discuss the relationship between metabolism and cancer, as part of a larger effort to identify a broad-spectrum of therapeutic approaches. We focus on major alterations in nutrient metabolism and the emerging link between metabolism and epigenetics. Finally, we discuss potential strategies to manipulate metabolism in cancer and tradeoffs that should be considered. More research on the suite of metabolic alterations in cancer holds the potential to discover novel approaches to treat it.We would like to thank Leroy Lowe for conceptualization of the Halifax project, the unnamed reviewers of this manuscript for their suggestions, and colleagues in the field who drive the science described in this review. We apologize to those whose work could not be included due to space constraints. Finally, we acknowledge all the co-authors of this review who were part of the Target Validation Team, including (in alphabetical order): Amedeo Amedei, PhD, University of Florence, Italy; Amr Amin, PhD, UAE University, United Arab Emirates; S. Salman Ashraf, PhD, UAE University, United Arab Emirates; Asfar S. Azmi, PhD, Wayne State University, Karmanos Cancer Institute, United States; Dipita Bhakta, M.Sc., PhD, VIT University (Vellore Institute of Technology), India; Alan Bisland, University of Glasgow, Glasgow, UK; Chandra S. Boosani, PhD, Creighton University, United States; Sophie Chen, PhD, Ovarian and Prostate Cancer Research Trust Laboratory, United Kingdom; Hiromasa Fujii, MD, PhD, Nara Medical University, Japan; Alexandros Georgakilas, PhD, National Technical University of Athens, Greece; Gunjan Guha, M.Sc., PhD, Assistant Professor, SASTRA University, India; Dorota Halicka, MD, PhD, New York Medical College, United States; Bill Helferich, PhD, University of Illinois at Urbana Champaign, United States; Kanya Honoki, MD, PhD, Nara Medical University, Japan; W.N. Keith, University of Glasgow, Glasgow, UK; Sulma Mohammed, DVM, PhD, Purdue University Cancer for Cancer Research, United States; Elena Niccolai, University of Florence, Italy; Somaira Nowsheen, Mayo Graduate School, Mayo Clinic College of Medicine, Rochester, Minnesota, United States; Xujuan Yang, University of Illinois at Urbana Champaign, United States.This is the final version of the article. It first appeared from Elsevier via http://dx.doi.org/10.1016/j.semcancer.2015.10.002

You Get What You Pay For: The Effect of Top Executives\u27 Compensation on Advertising and R&D Spending Decisions and Stock Market Return

Although there is literature on how top executives\u27 compensation influences general management decisions, relatively little is known about whether and how compensation influences advertising and research-and-development (R&D) spending decisions. This study addresses two questions. First, is there an incentive effect of long- versus short-term compensation on advertising and R&D spending? Second, is there a mediation effect of advertising and R&D spending on the relationship between long- versus short-term compensation and stock market return? The authors address these questions using a combination of ExecuComp, Compustat, and Center for Research in Security Prices data on 842 firms during the 1993–2005 period. They find that an increase in the equity to bonus compensation ratio is positively associated with an increase in advertising and R&D spending as a share of sales. Advertising and R&D spending as a share of sales also mediates the effect of equity to bonus ratio on stock market return. The authors discuss implications for top management seeking to mitigate myopic management of resources by employing compensation to incentivize a longer-term orientation for advertising and R&D spending to improve stock return