Terminology
May 11th, 2010 by BioRunUp
The amount of acronyms used when trading these stocks can get quite confusing. Here is a list of commonly used terms in the Biotech trading sector:
510(K)
Medical Devices. Section 510(k)[14] of the Federal Food, Drug, and Cosmetic Act requires those device manufacturers who must register to notify FDA, at least 90 days in advance, of their intent to market a medical device.
This is known as Premarket Notification – also called PMN or 510(k) . It allows FDA to determine whether the device is equivalent to a device already placed into one of the three classification categories. Thus, “new” devices (not in commercial distribution prior to May 28, 1976) that have not been classified can be properly identified.

Any device that reaches market via a 510(k) notification must be “substantially equivalent” to a device on the market prior to May 28, 1976 (a “predicate device”). If a device being submitted is significantly different, relative to a pre-1976 device, in terms of design, material, chemical composition, energy source, manufacturing process, or intended use, the device nominally must go through a premarket approval, or PMA. This does not always happen.

As of 2007, this has been implemented by splitting devices into three classes:
- Class I: Devices that do not require premarket approval or clearance but must follow general controls. Dental floss is a class I device.
- Class II: Devices that are cleared using the 510(k) process. Diagnostic tests, cardiac catheters, and amalgam alloys used to fill cavities are all class II devices. The “predicate device” in question is often quite different, and this process is largely used to clear devices for marketing which do not meet the criteria to be considered class III. Hearing aids are class II devices.
- Class III: Devices that are approved by the Premarket Approval (PMA) process, analogous to a New Drug Application. These tend to be devices that are permanently implanted into a human body or may be necessary to sustain life. An artificial heart meets both criteria. The most commonly recognized class III device is an Automated External Defibrillator. Devices that do not meet either criterion are generally cleared as class II devices.
A device that reaches market via the 510(k) process is not considered to be “approved” by the FDA. Nevertheless, it can be marketed and sold in the United States. They are generally referred to as “cleared” or “510(k) cleared” devices.
Abbreviated New Drug Application (ANDA)
An Abbreviated New Drug Application (ANDA) contains data that, when submitted to FDA’s Center for Drug Evaluation and Research, Office of Generic Drugs, provides for the review and ultimate approval of a generic drug product. Generic drug applications are called “abbreviated” because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness. Instead, a generic applicant must scientifically demonstrate that its product is bioequivalent (i.e., performs in the same manner as the innovator drug). Once approved, an applicant may manufacture and market the generic drug product to provide a safe, effective, low cost alternative to the American public.
An official communication from FDA to a new drug application (NDA) sponsor that allows the commercial marketing of the product.Biologic License Application (BLA)
Biological products are approved for marketing under the provisions of the Public Health Service (PHS) Act. The Act requires a firm who manufactures a biologic for sale in interstate commerce to hold a license for the product. A biologics license application is a submission that contains specific information on the manufacturing processes, chemistry, pharmacology, clinical pharmacology and the medical affects of the biologic product. If the information provided meets FDA requirements, the application is approved and a license is issued allowing the firm to market the product.
CRL
Complete Response Letter. Basically a letter explaining why the FDA is not approving a drug. The Food and Drug Administration (FDA) is amending its regulations on new drug applications (NDAs) and abbreviated new drug applications (ANDAs) for approval to market new drugs and generic drugs (drugs for which approval is sought in an ANDA). The final rule discontinues FDA’s use of approvable letters and not approvable letters when taking action on marketing applications. Instead, we will send applicants a complete response letter to indicate that the review cycle for an application is complete and that the application is not ready for approval. We are also revising the regulations on extending the review cycle due to the submission of an amendment to an unapproved application and starting a new review cycle after the resubmission of an application following receipt of a complete response letter. In addition, we are adding to the regulations on biologics license applications (BLAs) provisions on the issuance of complete response letters to BLA applicants. We are taking these actions to implement the user fee performance goals referenced in the Prescription Drug User Fee Amendments of 2002 (PDUFA III) that address procedures and establish target timeframes for reviewing human drug applications.
Fast Track
Fast track is a process designed to facilitate the development, and expedite the review of drugs to treat serious diseases and fill an unmet medical need. The purpose is to get important new drugs to the patient earlier. Fast Track
addresses a broad range of serious diseases.
Determining whether a disease is serious is a matter of judgment, but generally is based on whether the drug will have an impact on such factors as survival, day-to-day functioning, or the likelihood that the disease, if left untreated, will progress from a less severe condition to a more serious one. AIDS, Alzheimer’s, heart failure and cancer are obvious examples of serious diseases. However, diseases such as epilepsy, depression and diabetes are also considered to be serious diseases.
Filling an unmet medical need is defined as providing a therapy where none exists or providing a therapy which may be potentially superior to existing therapy.
Any drug being developed to treat or prevent a disease with no current therapy obviously is directed at an unmet need. If there are existing therapies, a fast track drug must show some advantage over available treatment, such as:
- Showing superior effectiveness
- Avoiding serious side effects of an available treatment
- Improving the diagnosis of a serious disease where early diagnosis results in an improved outcome
- Decreasing a clinically significant toxicity of an accepted treatment
A drug that receives Fast Track designation is eligible for some or all of the following:
- More frequent meetings with FDA to discuss the drug’s development plan and ensure collection of appropriate data needed to support drug approval
- More frequent written correspondence from FDA about such things as the design of the proposed clinical trials
- Eligibility for Accelerated Approval, i.e., approval on an effect on a surrogate, or substitute endpoint reasonably likely to predict clinical benefit
- Rolling Review, which means that a drug company can submit completed sections of its New Drug Application (NDA) for review by FDA, rather than waiting until every section of the application is completed before the entire application can be reviewed. NDA review usually does not begin until the drug company has submitted the entire application to the FDA, and
- Dispute resolution if the drug company is not satisfied with an FDA decision not to grant Fast Track status.
In addition, most drugs that are eligible for Fast Track designation are likely to be considered appropriate to receive a Priority Review. Fast Track designation must be requested by the drug company. The request can be initiated at any time during the drug development process. FDA will review the request and make a decision within
sixty days based on whether the drug fills an unmet medical need in a serious disease.
Once a drug receives Fast Track designation, early and frequent communication between the FDA and a drug company is encouraged throughout the entire drug development and review process. The frequency of communication assures that questions and issues are resolved quickly, often leading to earlier drug approval and access by patients.
FDA Action Date
The action date tells when an FDA regulatory action, such as an original or supplemental approval, took place.
New Drug Application (NDA)
When the sponsor of a new drug believes that enough evidence on the drug’s safety and effectiveness has been obtained to meet FDA’s requirements for marketing approval, the sponsor submits to FDA a new drug application (NDA). The application must contain data from specific technical viewpoints for review, including chemistry, pharmacology, medical, biopharmaceutics, and statistics. If the NDA is approved, the product may be marketed in the United States. For internal tracking purposes, all NDA’s are assigned an NDA number.
Orphan Drug Status
The Orphan Drug Act (ODA) of January 1983, passed in the United States, with lobbying from the National Organization for Rare Disorders, is meant to encourage pharmaceutical companies to develop drugs for diseases that have a small market. Under the law, companies that develop such a drug (a drug for a disorder affecting fewer than 200,000 people in the United States) may sell it without competition for seven years, and may get clinical trial tax incentives.
Orphan drugs generally follow the same regulatory development path as any other pharmaceutical product, in which testing focuses on pharmacokinetics and pharmacodynamics,dosing, stability, safety and efficacy. However, some statistical burdens are lessened in an effort to maintain development momentum. For example, orphan drug regulations generally acknowledge the fact that it may not be possible to test 1,000 patients in a phase III clinical trial, as fewer than that number may be afflicted with the disease in question.
PDUFA
The Prescription Drug User Fee Act (PDUFA) was enacted in 1992 and renewed in 1997 (PDUFA II), 2002 (PDUFA III), and 2007 (PDUFA IV). It authorizes FDA to collect fees from companies that produce certain human drug and biological products. Since the passage of PDUFA, user fees have played an important role in expediting the drug approval process.
Priority Review
Prior to approval, each drug marketed in the United States must go through a detailed FDA review process. In 1992, under the Prescription Drug User Act (PDUFA), FDA agreed to specific goals for improving the drug review time and created a two-tiered system of review times – Standard Review and Priority Review.
Standard Review is applied to a drug that offers at most, only minor improvement over existing marketed therapies. The 2002 amendments to PDUFA set a goal that a Standard Review of a new drug application be accomplished within a ten-month time frame.
A Priority Review designation is given to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists. A Priority Review means that the time it takes FDA to review a new drug application is reduced. The goal for completing a Priority Review is six months.
Priority Review status can apply both to drugs that are used to treat serious diseases and to drugs for less serious illnesses. The FDA goal for reviewing a drug with Priority Review status is six months.
The distinction between priority and standard review times is that additional FDA attention and resources will be directed to drugs that have the potential to provide significant advances in treatment.
Such advances can be demonstrated by, for example:
- evidence of increased effectiveness in treatment, prevention, or diagnosis of disease;
- elimination or substantial reduction of a treatment-limiting drug reaction;
- documented enhancement of patient willingness or ability to take the drug according to the required schedule and dose; or
- evidence of safety and effectiveness in a new subpopulation, such as children.
A request for Priority Review must be made by the drug company. It does not affect the length of the clinical trial period. FDA determines within 45 days of the drug company’s request whether a Priority or Standard Review designation will be assigned. Designation of a drug as “Priority” does not alter the scientific/medical standard for approval or the quality of evidence necessary.







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Hi,
I have a question regarding NDA vs. PDUFA. I understand the difference in the definitions but it seems that in reading various articles they are treated almost interchangeably or have equal weight as far as what the FDA does. If the FDA has already approved a drug (by way of NDA) isn’t the PDUFA practically a foregone conclusion? Shouldn’t the NDA date be the one to look at when planning the run-up?
By the way your site is fantastic. You really have done a great job of compiling very useful information.
Thanks.
David
Great question. Mike Havrilla from MikeHavRX.com helped me out by putting this summary together:
- Prescription Drug User Fee Act (PDUFA) of 1992 – this is legislation that allowed FDA to collect fees associated with new drug / biological filings
- The PDUFA goal action date is a performance metric that seeks to review all NDAs, BLAs, sNDAs, or sBLAs within 6 months for priority review and 10 months for standard review, 2 months for a Class 1 Resubmission, and 6 months for a Class 2 Resubmission
- supplemental NDAs or BLAs are filed to obtain FDA marketing clearance for a new use, strength, or formulation of an already approved drug / biological agent
- the FDA typically responds within two months to formally accept and issue a PDUFA goal action date for all NDAs, BLAs, sNDAs, or sBLAs while there is a 14-day period to formally accept and issue a PDUFA goal action date for resubmissions to Complete Response Letters (CRL)
Awesome! Thanks.
Hi,
What is the difference between PDUFA and FDA panel. How these thigs affect the companies. Please reply
Thanks
Beji.
PDUFA is the rough date that the FDA will render their final decision by. In some cases the FDA appoints an advisory panel of experts before the PDUFA date to give a recommendation on approval. The FDA does not have to listen to the panel, however they seriously consider their opinion.
Thant means FDA panel is very important like PDUFA. Thanks for you valuable time and reply
Beji.
That is pretty interesting. It presented me a few ideas and I’ll be writing them on my web site eventually. I’m bookmarking your site and I’ll be back. Thank you again!
can you publish FDA data for comapanies and drugs that fall under
ORPHAN DRUG STATUS
PRIORITY REVIEW
FAST TRACK
FDA website sucks!
Hello,
Recently on the Yahoo/Finance Message Board, someone posted the paper listed below. In it, it uses terms like, Superstar, Castaway, Incrementalist and Trade-offs, as terms used within the FDA. I have searched the FDA site, but could not find any reference to these. Are these still being used and how do we determine if the company we’re invested in has a drug with one of these labels. The company I’m following is Cyclacel, cycc.
Thanks,
Rich
The Phase III Trial in the Era of Targeted Therapy:
Unraveling the “Go or No Go” Decision
By Thomas G. Roberts Jr, Thomas J. Lynch Jr, and Bruce A. Chabner