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.