Repositioned Drugs Surpass New Brands
Posted by Carlos on Oct 26, 2012
There are some very interesting data published yesterday on FDA approval statistics:
It was in 1984 when FDA first added the 505(b)(2) pathway for drug approval, a hybrid between the accelerated pathway for generic drug applications, and the standard de novo NDA pathway for proprietary drugs. But in the past 6 years, approvals received through the 505(b)(2) pathway have consistently outnumbered de novo NDAs.
For the most part, we agree with Clark Herman’s conclusion that the 505(b)(2) is a lower risk strategy, and hence can provide some returns to investors.
The trick is that the 505(b)(2) only provides three years of exclusivity. So the regulatory path, pricing strategy, product positioning, and all the other key factors must be rock solid at launch to ensure rapid product uptake. There simply is not enough time for a slow launch or ramp up when you only have three years.
At Lacerta Bio, we’re big fans of the low cost/low risk/lower (but safer) reward product development model. These types of opportunities can make a real difference in patient’s lives at a reasonable cost. This pathway also provides a number of smaller companies (many that are largely unknown in the headline-writing community) to enter the market and succeed.