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United States Stock Market Response to FDA Approval of New Dermatologic Drugs.

BACKGROUND
The Food and Drug Administration (FDA) has approved several new dermatologic drugs in the last decade. The public response to their approval has not yet been evaluated.


OBJECTIVE
To analyze the United States stock market response surrounding FDA approval of new dermatologic drugs between 2008 and 2018.


METHODS
A list of 34 FDA approved dermatologic drugs for publicly traded companies was compiled from the CenterWatch New Dermatology Drugs List and the FDA Annual Reports on New Drugs. Company and stock market data was acquired from the Center for Research in Security Prices (CRSP) United States Stock database. Cumulative abnormal returns (CAR) were calculated as the difference between raw returns and expected value-weighted returns. Data analyses were performed using SAS 9.4 (Cary, NC).


RESULTS
The average CAR for the 21-day window period surrounding FDA approval of new dermatologic drugs was +1.71%. Drugs approved for the treatment of hyperhidrosis (+17.7%), bacterial skin infections (+7.18%), and rosacea (+6.83%) added the most market value.


LIMITATIONS
The market value added to private or internationally traded companies could not be assessed.


CONCLUSION
FDA approval of dermatologic drugs generally has a positive market response. Information on market reaction may provide important insights for investors, pharmaceutical companies, and researchers. J Drugs Dermatol. 2020;19(6): doi:10.36849/JDD.2020.5033.