Robert Huebscher, Advisor Perspectives, Can Financial Engineering Cure Cancer? here.
Andrew Lo thinks financial engineering can cure cancer.
The biggest problems confronting cancer research are the enormous cost of developing drugs, the long research and development cycles and the high likelihood that a drug will fail. The rewards for a successful drug, however, are enormous – not just medically, but financially as well.
Lo has proposed a way that drug companies can use financial engineering to spread risks among investors and provide incentives to develop successful cancer treatments. He claims that a securitized-debt offering – a “cancer mega-fund” – would offer investors attractive risk-adjusted returns.