A new approach to assess drug development performance

► We develop a new approach to assess the drug development performance of the largest twenty-height largest biopharmaceutical companies. ► Our method provides an overview of firms' ability (or inability) to outperform the industry expected performance. ► We use econometric analysis to prove that financial performance (i.e. growth in revenues) can be enhanced when a biopharmaceutical firm outperforms the industry trend in innovation. ► Our findings also provide interesting clues about the impact of strategic decisions concerning the allocation of R&D investments. ► In particular we find that the concentration of such investments, in a restricted number of areas, is positively related to financial performance.