Is Innovation Priced? Pharmaceutical Evidence from the Stock Market

Recent advances in bioinformatic and public health research have been noteworthy specifically in the cross-sectional and longitudinal analyses of microbiome data. We can naturally extend the latest microbiome analytics to the time series dimension of the pharmaceutical industry in the stock market. Following Gu et al. (2022), we introduce FinCloud, a web-based application for the intervention analysis and forecasting of stock prices. The abnormal returns around the U.S. Food and Drug Administration’s drug approvals show that innovation efforts are priced in the firm value of pharmaceutical companies listed on U.S. stock exchanges.