Patent Information Disclosure and Market Reactions: Empirical investigation by using text-based novelty and impact indicators

We examine how financial markets value patented innovation across disclosure stages in the pharmaceutical sector. Using U.S. patents from publicly listed firms, we construct text-based measures of technological novelty and early diffusion impact. Event-study regressions based on KPSS returns reveal that market reactions are already sizable at the stage of scientific publication for patent–paper pairs (PPPs) and are nearly as large at pre-grant publication as at the patent granting stage—challenging the grant-centric view of patent valuation. Stage-specific regressions show a marked shift in valuation logic: novelty is priced early, especially when peer-reviewed science certifies the invention, while impact becomes salient only once technical content and downstream reuse become observable at the patent publication or granting stage. In PPPs, novelty is strongly rewarded in early stages, but impact is not, suggesting that science-linked inventions follow a distinct valuation channel. These patterns are robust to stricter PPP-matching thresholds and alternative impact metrics. Our findings highlight that both when and what gets disclosed jointly shape the financial value of innovation.