The Impact of Brand Quality on Shareholder Wealth

This study examines the impact of brand quality on three components of shareholder wealth: stock returns, systematic risk, and idiosyncratic risk. The study finds that brand quality enhances shareholder wealth insofar as unanticipated changes in brand quality are positively associated with stock returns and negatively related to changes in idiosyncratic risk. However, unanticipated changes in brand quality can also erode shareholder wealth because they have a positive association with changes in systematic risk. The study introduces a contingency theory view to the marketing-finance interface by analyzing the moderating role of two factors that are widely followed by investors. The results show an unanticipated increase (decrease) in current-period earnings enhances (depletes) the positive impact of unanticipated changes in brand quality on stock returns and mitigates (enhances) their deleterious effects on changes in systematic risk. Similarly, brand quality is more valuable for firms facing increasing competition (i.e., unanticipated decreases in industry concentration). The results are robust to endogeneity concerns and across alternative models. The authors conclude by discussing the nuanced implications of their findings for shareholder wealth, reporting brand quality to investors, and its use in employee evaluation

AGTR1 overexpression defines a subset of breast cancer and confers sensitivity to losartan, an AGTR1 antagonist

Breast cancer patients have benefited from the use of targeted therapies directed at specific molecular alterations. To identify additional opportunities for targeted therapy, we searched for genes with marked overexpression in subsets of tumors across a panel of breast cancer profiling studies comprising 3,200 microarray experiments. In addition to prioritizing ERBB2, we found AGTR1, the angiotensin II receptor type I, to be markedly overexpressed in 10–20% of breast cancer cases across multiple independent patient cohorts. Validation experiments confirmed that AGTR1 is highly overexpressed, in several cases more than 100-fold. AGTR1 overexpression was restricted to estrogen receptor-positive tumors and was mutually exclusive with ERBB2 overexpression across all samples. Ectopic overexpression of AGTR1 in primary mammary epithelial cells, combined with angiotensin II stimulation, led to a highly invasive phenotype that was attenuated by the AGTR1 antagonist losartan. Similarly, losartan reduced tumor growth by 30% in AGTR1-positive breast cancer xenografts. Taken together, these observations indicate that marked AGTR1 overexpression defines a subpopulation of ER-positive, ERBB2-negative breast cancer that may benefit from targeted therapy with AGTR1 antagonists, such as losartan