Comparing long-term value creation after biotech and non-biotech IPOs, 1997–2016

Ekaterina Galkina Cleary; Laura M. McNamee; Skyler de Boer; Jeremy Holden; Liam Fitzgerald; Fred D. Ledley

doi:10.1371/journal.pone.0243813

Peer Review History

Original SubmissionFebruary 11, 2020
16 Sep 2020 Decision Letter - Alejandro Raul Hernandez Montoya, Editor PONE-D-20-04037 Comparing long-term value creation after biotech and non-biotech IPOs, 1997-2016 PLOS ONE Dear Dr. Ledley, Thank you for submitting your manuscript to PLOS ONE. After careful consideration, we feel that it has merit but does not fully meet PLOS ONE’s publication criteria as it currently stands. Therefore, we invite you to submit a revised version of the manuscript that addresses the points raised during the review process. First of all, let me please apologize for the delay in sending you this decision. In my opinion, your paper is almost ready for publication. As you may see from your reviewers, both of them consider your paper worthy and very interesting. So do I. As you know, our first reviewer already has accepted your paper for publication, while the other referee is asking you some basic explanations and to clarify some issues related with with your methodology, that in my opinion you should overcome neatly. Please submit your revised manuscript by Oct 31 2020 11:59PM. If you will need more time than this to complete your revisions, please reply to this message or contact the journal office at plosone@plos.org. When you're ready to submit your revision, log on to https://www.editorialmanager.com/pone/ and select the 'Submissions Needing Revision' folder to locate your manuscript file. Please include the following items when submitting your revised manuscript: A rebuttal letter that responds to each point raised by the academic editor and reviewer(s). You should upload this letter as a separate file labeled 'Response to Reviewers'. A marked-up copy of your manuscript that highlights changes made to the original version. You should upload this as a separate file labeled 'Revised Manuscript with Track Changes'. An unmarked version of your revised paper without tracked changes. You should upload this as a separate file labeled 'Manuscript'. If you would like to make changes to your financial disclosure, please include your updated statement in your cover letter. Guidelines for resubmitting your figure files are available below the reviewer comments at the end of this letter. If applicable, we recommend that you deposit your laboratory protocols in protocols.io to enhance the reproducibility of your results. Protocols.io assigns your protocol its own identifier (DOI) so that it can be cited independently in the future. For instructions see: http://journals.plos.org/plosone/s/submission-guidelines#loc-laboratory-protocols We look forward to receiving your revised manuscript. Kind regards, Alejandro Raul Hernandez Montoya, Ph D Academic Editor PLOS ONE Journal Requirements: Additional Editor Comments (if provided): [Note: HTML markup is below. Please do not edit.] Reviewers' comments: Reviewer's Responses to Questions Comments to the Author 1. Is the manuscript technically sound, and do the data support the conclusions? The manuscript must describe a technically sound piece of scientific research with data that supports the conclusions. Experiments must have been conducted rigorously, with appropriate controls, replication, and sample sizes. The conclusions must be drawn appropriately based on the data presented. Reviewer #1: Yes Reviewer #2: Partly ******** 2. Has the statistical analysis been performed appropriately and rigorously? Reviewer #1: I Don't Know Reviewer #2: Yes ****** 3. Have the authors made all data underlying the findings in their manuscript fully available? The PLOS Data policy requires authors to make all data underlying the findings described in their manuscript fully available without restriction, with rare exception (please refer to the Data Availability Statement in the manuscript PDF file). The data should be provided as part of the manuscript or its supporting information, or deposited to a public repository. For example, in addition to summary statistics, the data points behind means, medians and variance measures should be available. If there are restrictions on publicly sharing data—e.g. participant privacy or use of data from a third party—those must be specified. Reviewer #1: Yes Reviewer #2: Yes ****** 4. Is the manuscript presented in an intelligible fashion and written in standard English? PLOS ONE does not copyedit accepted manuscripts, so the language in submitted articles must be clear, correct, and unambiguous. Any typographical or grammatical errors should be corrected at revision, so please note any specific errors here. Reviewer #1: Yes Reviewer #2: Yes ****** 5. Review Comments to the Author Please use the space provided to explain your answers to the questions above. You may also include additional comments for the author, including concerns about dual publication, research ethics, or publication ethics. (Please upload your review as an attachment if it exceeds 20,000 characters) Reviewer #1: As far as I understand the approach the authors too a relevant question is new and very interesting. On the one hand the fact that pairs are chosen is relevant to this approach and probably increases significance of the approach, but the criteria of the choice, adequately discussed in the article, obviously leave room for arbitrariness. On the other hand the very fact taht pairs with comparable dates and other conditions have been chosen, gives the entire study a strong background of credibility. Yet credibility and statistical significante are not the same, but I personally weigh credibility as a very important factor. This is the basis for my judgement that the data support the conclusions but that I do not know if the statistics have been performed rigorously, yet I think they have been performed appropriately in the sense that the best was done with the data available. I wish to emphasize that the authors plainly state what they do and how they obtain their conclusions, allowing the reader to draw his own conclusions, if he so wishes! As for the relevance, I believe that the present crisis enhances the relevance of this paper, as biotech firms play a really important role, and to know that the high risk assigned to biotech even in venture capital circles may well be exaggerated. Summarizing I wish to say, that I strongly support the publication of this paper in its presnet form, as it is innovative, clearly written and timely! Reviewer #2: This paper's objective, to compare the financial performance of BIOTECH companies with the performance of NON-BIOTECH companies, is very interesting. However, there are needed the following points: (1) more rigorous explanation on the methodology techniques used within the research (especially on the Kaplan-Meier time-to-event analysis); (2) to provide significance information about the arguments of choosing the financial variables (annual revenue, R&D expense, EBITDA, net income or loss), considering the differences in the business architecture of BIOTECH and NON-BIOTECH companies; and (3) the reasons of the results instead of just analysis. What are the implications of the results? A significant part of the research is only a descriptive analysis. The topic of this manuscript falls within the scope of PLOS ONE. ****** 6. PLOS authors have the option to publish the peer review history of their article (what does this mean?). If published, this will include your full peer review and any attached files. If you choose “no”, your identity will remain anonymous but your review may still be made public. Do you want your identity to be public for this peer review? For information about this choice, including consent withdrawal, please see our Privacy Policy. Reviewer #1: Yes:** Thomas H. Seligman Reviewer #2: No [NOTE: If reviewer comments were submitted as an attachment file, they will be attached to this email and accessible via the submission site. Please log into your account, locate the manuscript record, and check for the action link "View Attachments". If this link does not appear, there are no attachment files.] While revising your submission, please upload your figure files to the Preflight Analysis and Conversion Engine (PACE) digital diagnostic tool, https://pacev2.apexcovantage.com/. PACE helps ensure that figures meet PLOS requirements. To use PACE, you must first register as a user. 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Revision 1
2 Oct 2020 Author Response Reviewer #1: As far as I understand the approach the authors too a relevant question is new and very interesting. On the one hand the fact that pairs are chosen is relevant to this approach and probably increases significance of the approach, but the criteria of the choice, adequately discussed in the article, obviously leave room for arbitrariness. On the other hand, the very fact that pairs with comparable dates and other conditions have been chosen, gives the entire study a strong background of credibility. Yet credibility and statistical significant are not the same, but I personally weigh credibility as a very important factor. This is the basis for my judgement that the data support the conclusions but that I do not know if the statistics have been performed rigorously, yet I think they have been performed appropriately in the sense that the best was done with the data available. Thank you for your comments about the challenge of knowing whether statistical tests are “credible” and meaningful, as well as quantitatively significant. In formal, statistical language, the statistical analysis simply estimates the probability of observing the data we described, assuming the null hypothesis that there is no difference between the BIOTECH and paired CONTROL datasets. In our experimental design, the paired companies were selected to have comparable IPO dates as a control for general market conditions, which is known to be a major factor in any study of company stock performance. We would note that treating any particular p value as “significant” is arbitrary. Following the recommendations of the American Statistical Association, this manuscript reports the calculated p-values themselves, and refrains from designating any specific value as significant or not significant. (The ASA Statement on p-Values: Context, Process, and Purpose, https://amstat.tandfonline.com/doi/full/10.1080/00031305.2016.1154108) I wish to emphasize that the authors plainly state what they do and how they obtain their conclusions, allowing the reader to draw his own conclusions, if he so wishes! As for the relevance, I believe that the present crisis enhances the relevance of this paper, as biotech firms play a really important role, and to know that the high risk assigned to biotech even in venture capital circles may well be exaggerated. Summarizing I wish to say, that I strongly support the publication of this paper in its present form, as it is innovative, clearly written and timely! Reviewer #2: This paper's objective, to compare the financial performance of BIOTECH companies with the performance of NON-BIOTECH companies, is very interesting. However, there are needed the following points: (1) more rigorous explanation on the methodology techniques used within the research (especially on the Kaplan-Meier time-to-event analysis); As requested, we have added a section to the Methods section detailing the Kaplan-Meier time-to-event analysis on pg. 19 and added a short, non-technical description of the method in the text on pg. 8. We also added an explanation of the use of the Kolmogorov-Smirnov and Bonferroni correction on pgs. 19 and 20, respectively. (2) to provide significance information about the arguments of choosing the financial variables (annual revenue, R&D expense, EBITDA, net income or loss), considering the differences in the business architecture of BIOTECH and NON-BIOTECH companies; and We have added a section to Results describing each of these variables describing these variables and their relevance on pg. 9. The question about the relevance of accounting metrics given the different architecture of BIOTECH and NON-BIOTECH companies is important. We would note that this analysis focuses explicitly on financial metrics based on data prepared in accordance with U.S. US GAAP standards (Generally Accepted Accounting Practice). These standards are designed explicitly to provide comparability and consistency across industrial sectors and between companies, and are used by investors as benchmarks to guide investments in companies with different architectures. We would not claim that these metrics are perfect comparators, and, as noted in the text, in selecting the paired controls, we eliminated companies in certain areas that provided particularly problematic comparisons. (3) the reasons of the results instead of just analysis. What are the implications of the results? A significant part of the research is only a descriptive analysis. We have extensively revised a portion of the discussion to address the implications of the results, while carefully staying away from any inferences of causality from the statistical analysis. Much of this revision involved consolidating some of the comments originally scattered through the Results section into a more coherent Discussion starting on pg. 14. Attachments Attachment Submitted filename: REVIEWERS COMMENTS AND RESPONSE.docx https://doi.org/10.1371/journal.pone.0243813.r002
30 Nov 2020 Decision Letter - Alejandro Raul Hernandez Montoya, Editor Comparing long-term value creation after biotech and non-biotech IPOs, 1997-2016 PONE-D-20-04037R1 Dear Dr. Ledley, We’re pleased to inform you that your manuscript has been judged scientifically suitable for publication and will be formally accepted for publication once it meets all outstanding technical requirements. Within one week, you’ll receive an e-mail detailing the required amendments. When these have been addressed, you’ll receive a formal acceptance letter and your manuscript will be scheduled for publication. An invoice for payment will follow shortly after the formal acceptance. To ensure an efficient process, please log into Editorial Manager at http://www.editorialmanager.com/pone/, click the 'Update My Information' link at the top of the page, and double check that your user information is up-to-date. If you have any billing related questions, please contact our Author Billing department directly at authorbilling@plos.org. If your institution or institutions have a press office, please notify them about your upcoming paper to help maximize its impact. If they’ll be preparing press materials, please inform our press team as soon as possible -- no later than 48 hours after receiving the formal acceptance. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information, please contact onepress@plos.org. Kind regards, Alejandro Raul Hernandez Montoya, Ph D Academic Editor PLOS ONE Additional Editor Comments (optional): Reviewers' comments: https://doi.org/10.1371/journal.pone.0243813.r003
Formally Accepted
4 Dec 2020 Acceptance Letter - Alejandro Raul Hernandez Montoya, Editor PONE-D-20-04037R1 Comparing long-term value creation after biotech and non-biotech IPOs, 1997-2016 Dear Dr. Ledley: I'm pleased to inform you that your manuscript has been deemed suitable for publication in PLOS ONE. Congratulations! Your manuscript is now with our production department. If your institution or institutions have a press office, please let them know about your upcoming paper now to help maximize its impact. If they'll be preparing press materials, please inform our press team within the next 48 hours. Your manuscript will remain under strict press embargo until 2 pm Eastern Time on the date of publication. For more information please contact onepress@plos.org. If we can help with anything else, please email us at plosone@plos.org. Thank you for submitting your work to PLOS ONE and supporting open access. Kind regards, PLOS ONE Editorial Office Staff on behalf of Dr. Alejandro Raul Hernandez Montoya Academic Editor PLOS ONE https://doi.org/10.1371/journal.pone.0243813.r004

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