Stock Price Reactions to Research and Development News on Pharmaceutical Companies in Japan

This study examines the effects of research and development (R&D) on the market value of Japanese pharmaceutical companies. Based on $\mathbf{1, 3 4 5}$ news articles, our event study analysis of 74 Japanese pharmaceutical companies from 1 January 2010 to 31 December 2021 revealed three key findings. First, the stock prices of the aforementioned companies generally respond positively to the business news, and more specifically, R&D-related news. Second, the impact on the share price is more pronounced as the R&D progress to more advanced stages. Lastly, the stock price responses to R&D news tend to diminish as the size of pharmaceutical companies increases.