A Portfolio Approach to Accelerate Therapeutic Innovation in Ovarian Cancer

Volume 17, No. 2, 2019
Shomesh Chaudhuri, Katherine Cheng, Andrew W. Lo, Shirley Pepke, Sergio Rinaudo, Lynda Roman and Ryan Spencer

We consider a portfolio-based approach to financing ovarian cancer therapeutics in which multiple candidates are funded within a single structure. Twenty-five potential early-stage drug development projects were identified for inclusion in a hypothetical portfolio through interviews with gynecological oncologists and leading experts, a review of ovarian cancer-related trials registered in the ClinicalTrials.gov database, and an extensive literature review. The annualized returns of this portfolio were simulated under a purely private sector structure both with and without partial funding from philanthropic grants, and a public–private partnership that included government guarantees. We find that public–private structures of this type can increase expected returns and reduce tail risk, allowing greater amounts of private sector capital to fund early-stage research and development.