FDA Calendar Events to Watch if you are a Biotech Stock Investor

We at Bioassociate have followed stock prices of public life science companies for some time, particularly stock behavior around notable events such as Investigational New Drug (IND) applications, New Drug Application (NDA), Biologics License Application (BLA), FDA Advisory Committee Meetings (AdCom) and Prescription Drug User Fee Act (PDUFA) dates. Below is a brief description of each of these events: 

• Investigational New Drug (IND): An IND application is the first step companies normally take in order to commence clinical trials of a compound. In essence, IND is the means by which a pharmaceutical company obtains permission to ship an experimental drug across state lines (usually to clinical investigators). Based on preclinical data, the FDA reviews the IND application for safety to assure that research subjects will not be subjected to unreasonable risk. If the application is cleared, the candidate drug usually enters a Phase 1 clinical trial.

• New Drug Application (NDA): An NDA is an application to market the drug. It is normally (with exceptions) filed with the FDA after all phases of the clinical trials have been completed and all data collected. Once the application is submitted, the FDA has 60 days to conduct a preliminary review which will assess whether the NDA is "sufficiently complete to permit a substantive review". If the NDA is found to be insufficiently complete (and reasons for this can vary from a simple administrative mistake in the application to a requirement to reconduct much of the testing), then the FDA rejects the application with the issue of a Refuse to File letter which is sent to the applicant explaining where the application has failed to meet requirements. If the NDA is complete, the FDA will accept the application and set a PDUFA (see below) date on which it will deliver its verdict.

• Supplemental NDA (sNDA): An application submitted for an already approved compound for any changes in packaging, labeling, dosages, ingredients or new indications

• Biologics License Application (BLA): A BLA is the equivalent of the NDA for biological drugs.

• Supplemental BLA (sBLA): An application submitted for an already approved biological drug for any changes in packaging, labeling, dosages, ingredients or new indications

• Advisory Committee Meeting (AdCom): An FDA Advisory Committee is a committee comprised of researchers and experts who lend their opinion to the FDA on key issues relating to new drug approvals. AdCom meetings are very common for first-time NDA applications, and are normally scheduled in the months running up to the FDA scheduled approval decision date. For supplemental applications, or for drugs which are re-submitting previously refused NDAs, AdCom meetings are uncommon. AdComs generate a lot of hype in the bio-investment world as they often foreshadow the FDA’s decision on new drugs. Although the FDA needn’t take AdCom advise, statistically the agency does follow the committee’s opinion, particularly if negative issues are raised during the meetings. Opportunity investors often closely follow live AdCom meetings, as they can momentarily influence a stock.

• Prescription Drug Free User Act (PDUFA): PDUFA is the date by which the FDA aims to deliver its marketing verdict for an NDA or BLA, following which the applicant may be granted or refused marketing approval, or requested to provide additional documentation and/or conduct further studies.

Of all the events on the FDA calendar, the PDUFA date arguably carries the most momentum, as it can signify the birth or death of a new medicine. PDUFA dates are also particularly relevant for biotech stock observers, as most life science companies will have had an IPO by the time their product is near to the marketing stage. To a pharma and biotech investor, an FDA marketing decision can potentially crash or soar a stock. PDUFA dates normally carry a significant stock run-up up to the date, and PDUFA-related intraday surges of up to 300% are not unheard of, which should be incentive enough to closely follow, and understand, the FDA calendar.