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This thread consists of a glossary of terms used in many of the articles found in the group Pharmaceuticals and Biotech. These are terms that investors in such companies will encounter on websites, published reports, financial filings, etc. If you find a term that isn’t included here, let me know, and I will write up a definition.
I found this exercise useful as it forced me to think through the drug development, filing and marketing processes and to think back on all the major terms that I have seen in 10-K/Q, 8-K and related filings, press releases and analyst reports. The glossary is in no way complete, so I will update it periodically.
I’ve tended to use the expression that I have seen most often in financial-relevant publications. It may be a shorthand expression and not technically totally accurate, but since it’s commonly found, I used it as the main definition. The more precise definition is also included and they're cross referenced.
Ideally, I’d like to be able to use a different color for words or terms available elsewhere in this glossary; unfortunately, that option isn’t open to me! Pharmaceutical Terms 0 to 9120 Safety Update
The safety update is an amendment to the original NDA filed with the FDA by the company which contains additional safety and/or efficacy data for the drug under review. This submission is likely to have been previously discussed with the agency, so the submission is expected and likely necessary to complete the review by the PDUFA date. 74-Day Letter
When the FDA receives an NDA from a pharmaceutical company, it does a high level review of the document to ensure that it is in the correct format and that the main points required for a complete review are addressed. This analysis is done within 60 calendar days of receiving the submission. If the NDA is acceptable, it is filed for a complete review. If there are problems, the agency issues a “Refusal to File” letter to the submitting party. This letter lists the defects in the filing that need to be corrected before the NDA can be accepted. These problems are communicated to the party within 74-days, hence the term 74-Day Letter. It’s more correctly called a “Filing Review Notification.” These steps are part of PDUFA, described elsewhere, which is a series of actions by Congress to speed up the approval process. The party will also be notified if the drug will undergo standard review (ideally 10 months from NDA filing) or accelerated review (6 months from initial filing). 482 (Form 482)
Form 482 is presented by an FDA inspector upon arrival at a manufacturing or formulation site; it details a notice of inspection. The FDA has the regulatory authority to inspect a site involved in the pharmaceutical industry at any time without warning. The FDA also inspects manufacturing and formulation sites outside the USA; however, in this case, the FDA gives two week’s notice to the manufacturing site of the planned inspection. This notice does not occur in plants based in the US. 483 (Form 483)
Form 483 is a Notice of Inspectional Observations provided by an FDA inspector to the compliance officer or other designated party at a manufacturing or formulation plant. The form contains observations by the inspector that show points of concern or significant non-compliance with the SOPs in the cGMP system or deviations from generally accepted industry practices that impacts the manufacturing or production process. Form 483 is reviewed at the FDA office and forwarded as an official communication to the company, when it becomes the position of the agency. Failure to respond to items listed on a 483 could result in the issuance of a Warning Letter or regulatory action by the FDA. Pharmaceutical Terms AAccelerated Review
In certain situations after the NDA is reviewed for completeness, the agency may inform the submitting party that the NDA will receive an accelerated review. In this case, the PDUFA date is normally six months after the initial filing of the NDA rather than the standard ten. Active Pharmaceutical Ingredient (API)
The active pharmaceutical ingredient, API or drug substance, is the molecule, the chemical entity, that does the work in slowing or arresting a biological process. In a typical tablet, the active ingredient is often under one percent by weight of the total mass of the drug. The API is the item that is usually patented by the drug company. It must be manufactured under cGMP (discussed elsewhere) and adhere to rigorous quality, safety and purity standards. Active ingredients typically cost hundreds to thousands of dollars per kilogram and are often the most expensive component in a drug. ADME
ADME stands for absorption, distribution, metabolism and excretion. It represents a series of experiments carried out on all active ingredients in animal systems to determine how the drug gets into the body, where it is found in the body, how the body metabolizes or chemically destroys the drug and how it is expelled from the body. To be useful, a drug has to have a certain concentration in the bloodstream to reach the target cell where it does the work of interrupting the progression of a disease: too low and it is ineffective; too high and it could be toxic. The route of administration of a drug influences the ADME properties of a drug. ADME studies show if the ideal concentration, the therapeutic window, can be reached. ADME studies are part of the determination of the pharmacokinetics of the drug. Adverse Event
An adverse event or AE is the term used instead of “side effect.” Adverse events are most often discussed in the context of a clinical trial and are classified in various ways. The most serious adverse event is, of course, the death of the subject. Fatalities are carefully examined and often an independent panel adjudicates to the cause to determine if the drug was involved. Other AEs include things like headaches, nausea, rashes, etc. Monitoring and reporting of AEs fall under Good Clinical Practices. If it’s clear that AEs are associated with a drug, they may be included in the drug label. Advisory Committee
An advisory committee is a panel of experts—often practicing physicians, scientists, clinicians, consultants, etc.—experience in a given field and assembled by the FDA to give input on important issues. The most common use of these Advisory Committees or Panels is in giving input on the efficacy and safety of new drugs; the committee meeting is often used to discuss what the reviewer might see as deficiencies in the filing. The FDA has around 50 such committees in different areas. About 20 to 25% of NDAs are referred to a committee or committees for review. The committee gives its opinion—usually at least 55 days before the PDUFA date for the drug. The FDA is not obliged to follow the recommendations of the committee. It sometimes declines to approve a drug that the committee recommends. More rarely, the FDA grants marketing approval to a drug that the committee turns down. Amendments
An amendment is a submission by a pharmaceutical company following either a request for information from the FDA to its NDA or to supplement the original submission. Most amendments focus on clinical issues, followed by updates to the CMC section. Antisense
Biotechnology drugs, macromolecules, are proteins, monoclonal antibodies (another type of protein), anti-sense drugs and gene therapy. DNA consists of two strands: one is the complement of the other. RNA (there are different types of RNA) is a single strand of DNA-like components. RNA carries information from DNA to another apart of the cell where a protein is made. An anti-sense drug consists of components that complement those in RNA. So the concept is to introduce a complementary strand which would “stick” to the RNA and prevent it for continuing in a biochemical process. Anti-sense drugs are a different way to trying to interrupt the progress of a disease. Anti-sense drugs are still in the development phase. API (see Active Pharmaceutical Ingredient) Approval Letter
An approval letter is a communication form the FDA confirming that the company filing an NDA has marketing approval for the drug. Pharmaceutical Terms B - CBiotech Company
Wall Street defines a biotech company very broadly to include small molecule discovery companies, large molecule discovery companies, tools and information companies. Often, if a company was founded after, say, 1980 and is focused on the development or on supporting the development of novel or generic drugs, it’s referred to as a biotech company. It’s a frustratingly imprecise definition, but the problem is that Wall Street tends to be very sloppy what it includes as a biotech company. Biotechnology itself is more a collection of enabling technologies targeted on living processes at the molecular level rather than a defined discipline such as chemistry or physics. Brand Name
A brand name drug is a drug that is marketed under a trademarked name. The active ingredient may be patented, but the drug itself is trademarked. For example, Lipitor is the brand name or trade name for Atorvastatin. CBER
CBER, the Center for Biologics Evaluation and Research is one of the six centers in the Food and Drug Administration. The acronym CEBR is produced as SEE bear. The center focuses on biological drugs, though the center has evaluated small molecule drugs too. CBER has responsibility for vaccines, gene therapy, and blood transfusion. CBER reviews many biological drugs. CDER
CDER (pronounced like the tree, cedar) is one of the six centers in the US Food and Drug Administration. CDER stands for Center for Drug Evaluation and Research. CDER has oversight over most drugs; most small molecule drugs are submitted to CDER for marketing approval. Large molecule drugs are submitted to CBER. cGMP
cGMP stands for current good manufacturing practices, a framework to ensure manufacturing consistency and quality outlined in summary form in the US Code of Federal Regulations. GMP, as its often called, is now found worldwide for the manufacture of drugs, food and nutritional products. GMP is a ‘moving target”: in many respects, the FDA doesn’t set the bar for what constitutes good manufacturing practices: it expects the manufacturers and formulators of drugs to be current with the best practices in the industry and to have a written cGMP system to which it rigorously adheres. Deviations from the quality system employed by the company or practices which fall short of what’s standard in the industry can result in the FDA taking action against a company. The FDA regularly inspects manufacturing and formulation sites. Clinical Trial
A clinical trial is a highly controlled scientific experiment where a drug is administered to a group of human volunteers who freely agree to participate in the activity in an effort to yield safety and efficacy information on the API. Clinical trials are used to discover things like the requisite doses of the drug; to compare and experimental drug to an existing standard of care; or to determine the effect of a combination of drugs used together. These trials are carried out under Good Clinical Practices. The FDA requires two, phase III trials that meet the primary endpoint before a drug is given marketing approval. Trials are carried out in a controlled setting, such as hospitals, by trained experts, often physicians. The trials are controlled (one group chosen at random receives the drug, the other receives a placebo or current standard of care); double-blind (neither patient nor doctors know who receives the drug in question), and multi-centered: carried out in different parts of the country. Worldwide, there are about twelve million people currently enrolled in different clinical trials. CMC section (Chemistry, Manufacturing and Controls)
The CMC section is included in a regulatory filing to support an IND or NDA filing with a regulatory authority. The CMC section includes information on how and where the drug substance is manufactured, produced and related items. Contract Manufacturing Organization
A contract manufacturing organization, a CMO, is a company that manufactures the API for a pharmaceutical company. CMOs often work on the development of the synthetic route to the drug too and provide material to support the clinical trials for the drug. CMOs can work on biological or small molecule drugs. CMOs are one of the fastest growing parts of the pharmaceutical industry. Contract Research Organization
A contract research organization, a CRO, is a company that supports the preclinical development of a drug; analytical work for a drug; clinical trial activity for a drug or other analytical and preparatory work for a regulatory filing such as an IND or NDA. A CRO is distinguished from a CMO in that it doesn’t develop the process for or the manufacturing of a new chemical or biological entity. A CRO often provides support for all other activities. Pharmaceutical Terms D - EDosage Form
The dosage form is the method through which the drug is delivered: a tablet, capsule, aerosol, a patch, in an injectable form, etc. The dosage form is produced under cGMP conditions and is highly regulated by the FDA and other national agencies. Drug Development
Drug development refers to how the small molecule or biologic is developed from a simple laboratory process to a stable and reproducible manufacturing process. It may also refer to the development, scale-up and commercial-scale manufacture of the final dosage form. Drug Product
Drug Product is an older expression that is used to distinguish the final dosage form (see dosage form) from the drug substance (the API or active pharmaceutical ingredient). Drug Recall
A drug recall is a voluntary or regulatory effort to pull a prescription or generic drug from the market. Drug recalls are extremely expensive and can be triggered by defects in the manufacturing process or the appearance of adverse events. The FDA has the statutory authority to recall drugs, though in most cases it is done in agreement with the drug company. Drug Substance (see Active Pharmaceutical Ingredient) Endpoint (see Primary Endpoint) EMA
The EMA is the European Medicines Agency and is, in some respects, the European counterpart of the FDA. The EMA works closely and coordinates the separate national agencies of EU member states. For certain drugs, the EMA can grant marketing approval for drugs in the EU. Emerging Pharmaceutical Company
An emerging pharmaceutical company is generally viewed as a discovery and development company in the pharmaceutical space that has get to generate sustainable earnings. Gilead, Biogen, Genzyme, Genentech and Amgen once in this group and are now fiscally stable companies. Emerging companies usually depend on partnership agreements, secondary offerings from public markets, or infusions of cash from venture capitalists to sustain the company. End of Phase 2 Meeting
This is one of the two major meetings that most drug companies have with the FDA. This meeting occurs after the Phase 2 studies are completed and before the plans for a Phase 3 study are finalized. At this meeting, the company discusses its plans with the FDA, detailing the phase 3 studies it intends to carry out; the FDA works with the company on an “endpoint”: if the clinical trials meet this endpoint, they are deemed successful. A discussion also takes place on any scientific, manufacturing or safety issues surrounding the drug. This meeting is extremely important because the FDA essentially relays to the company what it needs to accomplish to get its drug approved. Excipient
Drugs consist of active and inactive pharmaceutical ingredients. The active is often called the drug substance; the inactive ingredients are called excipients. In tablet form, excepients include coatings, binders, colorants, flavors, preservatives, etc. Most of a tablet consists of excipients; they’re chosen so that the tablet will break apart at the correct point in the digestive track. They can also help the active ingredient permeate the digestive track to get to the bloodstream where the active ingredient does its work. The combination of the active ingredient and the excipients is called the drug formulation. The formulation is usually a trade secret. In older drugs, the active ingredient could weigh a large fraction of a gram (say 100 to 500 milligrams); in modern drugs, the active is on the order of 10 milligrams. As a point of reference, an M&M weighs approximately a gram. The active ingredient in Lipitor is often 1% of a gram; the other 99% are excipients. Pharmaceutical Terms F - GFast Track Development Program
When a drug is deemed to be superior, has other exceptional characteristics or where there is a clear and imminent need for the therapy, the FDA may include the development of the drug in the fast track program. In this program, the FDA works with the pharmaceutical company on the development and clinical plans to ensure that the work is carried out as quickly and safely as possible. Inclusion in this program is requested by the pharmaceutical company and granted by the FDA. Final Dosage Form (see Dosage Form) First-in-Man Study (FIM)
A first-in-man study is a clinical trial where the investigational new drug is first given to human subjects; it is almost always a Phase I clinical trial. FDA
FDA, the US Food and Drug Administration, is an administration under the Department of Health and Human Services with regulatory oversight over food, drugs and cosmetics. The FDA was founded in 1906. It oversees drug approval and marketing. Filing Review Notification (see 74-day letter) First in Class
First in class refers to a drug that focuses on a new biological mechanism to treat a disease. First in class often means that the innovating company has discovered a new biological target, which may give it a few years lead before another innovator can work on a competing therapy. Gene Therapy
Gene therapy is an umbrella term used to develop therapies to treat genetic based illnesses by changing the chemical makeup of a gene in a living cell. Generic
Broadly speaking, a drug becomes generic when the patent on the active ingredient expires. Patents are usually filed when the drug is in development, before the drug enters the clinic. While patents last twenty years, companies usually have eight to twelve years of marketing exclusivity before generic equivalents are given marketing approval by a regulatory agency such as the FDA. GMP (see cGMP) Good Clinical Practices
Good clinical practice (GCP) is a global standard for the conduct of clinical trials where a drug is administered to humans. GCP is guided by the ICH, the international committee on harmonization, which also provides standards for stability studies and, increasingly, cGMP for manufacturing. Good Manufacturing Practices (see cGMP) Pharmaceutical Terms H - LInformation Request
An information request is a communication from the FDA made to a company submitted an NDA for supplemental data or clarification. The request is made during the review process. The request may be made to address shortcomings in the regulatory filing, the NDA. Delays in responding to the FDA could result in the PDUFA date being pushed forward. In silico
In silico is a term used for a computer simulation. Some chemical and biological processes are modeled on computer systems and these are used to complement animal and clinical studies. In vitro
In vitro experiments are those that are conducted in the laboratory or glassware. Work in vitro is normally carried out in the preclinical phase of drug discovery or to support chemical development work. In vivo
In vivo work is carried out in living entities, cell lines or animals. The experiments are designed to mimic systems in the human body. Inactive Pharmaceutical Ingredient (see Excipient) Indication
An indication, as opposed to a contraindication, is the reason that a drug is applied. Drugs are approved for specific indications. Investigational New Drug (IND)
An IND is a regulatory filing with the FDA that requests permission to administer the drug to humans in a clinical trial. The application contains details of the preclinical work carried out by the company, the target indication, how the drug is to be administered and the clinical trial conducted. The IND must be approved by the FDA prior to administering the drug to humans. Labeling
A drug label is a document approved by the FDA that provides all printed detailed information on the drug, its usage and any warnings or other issues with the drug. Large Molecule (see Macromolecule) Pharmaceutical Terms M - NMacromolecule
The world of drugs, broadly speaking, is divided into traditional small molecules and macromolecules. A macromolecule is a protein, antibody, antisense molecule, peptide or a hormone. Macromolecules are produced in biological processes. Small molecules may be synthesized in a traditional chemical processes; they can also be produced through fermentation. Macromolecules are normally the province of traditional biotechnology companies. Marketing Status
The marketing status refers to how the drug is sold: prescription or non-prescription (over-the-counter). Tentatively approved means that the drug is awaiting patent expiry of the innovator. Metabolism
Metabolism refers to biochemistry in living systems. Mechanism of Action
The mechanism of action (sometimes incorrectly referred to as the Mode of Action) is the specific biochemical process or processes through which a drug produces the desired effect in the body. The FDA needs an adequate description and understanding of the mechanism of action before approval is given to administer the drug in humans; laboratory and animal studies help provide this information. Monoclonal Antibody (mAb)
Monoclonal antibodies. mAbs, are identical copies of an protein produced by an immune cell that is cloned. Monoclonal antibodies are increasingly used as drugs in various applications. Once it enters the clinical, a mAb has about three times the chances of approval of a traditional small molecule drug. New Chemical Entity (NCE)
A new chemical entity is a novel molecule never before used as an API. New Drug Application or NDA
An NDA is a regulatory filing with the FDA to gain marketing approval for a drug in the United States. An NDA contains complete details on the preclinical and clinical development of the drug, including manufacturing, formulation, and packaging. The NDA is reviewed by the FDA, which can respond within as few as six to ten months. The goal of the review is to determine if the drug is safe and effective and is produced in a control fashion. New Molecular Entity (NME)
A new molecular entity is an umbrella term for new chemical or new biological entities. Pharmaceutical Terms O - POrphan Drug Status
An orphan drug is a designation for a therapy to treat a small patient population. In the US orphan drug status, granted by the FDA, is for patient populations of under 200,000. Companies that market orphan drug get certain tax and exclusivity status from the government. Over the Counter
Over-the-counter drugs (OTC) are those that may be sold without a prescription: Aspirin for example. Like prescription drugs, OTC drugs must undergo the same approval steps to receive marketing approval by the FDA. Parenteral Drug
A parenteral drug is one where the delivery mechanism by a route other than oral; parenteral usually refers to intravenous administration of a drug. Other routes of administration include transdermal, aerosol, sublingual, etc. Because the route of administration in non-oral drugs often by-passes the digestive system and potentially delivers the dosage more directly to the bloodstream, higher manufacturing standards are required. Parenteral drugs often have much lower doses than those delivered orally. If a drug has different formulations, each must have its own clinical trial or trials to support the different label claims. PDUFA Date
The PDUFA date has its origins in the Prescription Drug User Fee Act of 1993. With this act, innovators pay fees—over one million dollars—for the review process. Upon acceptance of the NDA, the FDA gives the company a PDUFA date, normally either six (accelerated) or ten (normal) months after submission of the NDA. If the agency is going to refer the drug to an Advisory Committee, the company is informed at least fifty-five days prior to the PDUFA date. Pharmacokinetics
Pharmacokinetics, of which ADME is part, is a branch of pharmacology that studies the biological processes involved in the fate of an API in a biological system. Phase I (clinical trial)
A phase I clinical trial is a controlled experiment where a drug is administered to human volunteer subjects to study safety and pharmacokinetics. Phase I trials are normally conducted on 20 to 50 healthy volunteers. Phase II (clinical trial)
A phase II trial is a controlled experiment where a drug is administered to human volunteer subjects to study dosage in the therapeutic window and efficacy. Phase II trials are conducted on 50 to 200 subjects with the indication of interest and few other complications. Phase III (clinical trial)
A Phase III trial is a large controlled experiment on human volunteer subjects in a randomized, double-blind, multi-center study against a placebo or the current standard of care. The drug must demonstrate statistically significant efficacy to reach its endpoint. The FDA normally requires two, successful phase III clinical trials to grant marketing approval. Post-marketing surveillance
This term is also called post-marketing study or study commitments; it is also referred to as Phase IV commitments and involves ongoing studies of the safety and effectiveness of the drug post-approval. This surveillance is required for drugs in various situations, including those that receive accelerated approval. Pre-Approval Inspection (PAI)
A pre-approval inspection or PAI is an investigation by the FDA of either the manufacturing site of the active ingredient or the formulation site of the drug product. A PAI takes place after an NDA is accepted by the FDA; successful completion of the inspection is necessary is marketing approval is to be granted. Pre-clinical
Pre-clinical is the sum total of all activities carried out on a drug before it is administered to humans. Clinical studies are carried out on humans; pre-clinical studies are carried out in silico, in vitro and on model systems. Pre-NDA meeting
A pre-NDA meeting is carried out between the innovative company and the FDA after the final phase III clinical trial but before an NDA is submitted. At this meeting, regulatory filing issues are discussed as well as data analysis and how the data will be presented. This meeting is normally the last interaction with the FDA before the NDA is submitted. Pre-submission meetings
The two main pre-submission meetings are End of Phase II meeting and the Pre-NDA Meeting that takes place between a drug company and the FDA. Protein
A protein is a macromolecule constructed from hundreds to tens of thousands amino acids. Proteins fold and unfold in specific ways; the way a protein folds on itself is critical to the biological processes that it governs. Proteins are ubiquitous in nature and are responsible for biological processes at the cellular level. A protein is often the biological target for a small molecule or peptide drug. Primary Endpoint
A primary endpoint is a measurable factor established prior to the start of a clinical trial that governs if the trial is deemed successful. For a fatal disease, a primary endpoint may mean survival. If there is a statistically meaningful differen Pharmaceutical Terms Q - SReference Listed Drug
The Reference Listed Drug is usually the novel drug to which generic formulations are compared to show bioequivalence. A company that wishes to market a generic form of the drug must compare favorably to the original therapy before it may be sold in the US. Refusal to File Letter
A Refusal to File Letter is issued by the FDA following submission of an NDA if the regulatory filing is incomplete or deficient in some fashion. Review of the filing is discontinued until the filing is complete. The decision is made sixty days after submission and the information is communicated to the drug company via the “74-day letter.” Generally, companies may address the concerns in the letter and resubmit the filing. Route of Administration
The route of administration is the pathway through which the drug enters the body. Most drugs are administered in oral form as a tablet, syrup or other mixture that is consumed like food through the digestive process. Other routes of administration include injection, topical, patch, sublingual, etc. There are cultural sensitivities surrounding the route of administration. For example suppositories are not view favorably in North America and northern Europe; this route of administration finds greater acceptance in countries such as France. Side Effect (see Adverse Event) Small Molecule
A small molecule is a chemical entity that is produced in a traditional chemical manufacturing plant. Small molecules average thirty to one hundred atoms. SPA (Special Protocol Assessment)
The SPA is a way in which the FDA gives evaluation and guidance on the protocols that form the basis of an NDA. Final marketing approval for the drug still depends on the safety and efficacy of the drug as determined in the phase III clinical trial and the overall risk/benefit determined by the FDA. The link below takes you to the official guidance document issued by the FDA in May, 2002. http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm080571.pdf
Standard of Care
The standard of care of the standard therapy is the appropriate course of action to treat a given disease. In life threatening diseases, a phase III clinical trial often uses a group receiving the standard of care or “gold standard” as the control.
Pharmaceutical Terms T- ZTarget
A target is a biological molecule or process that a research hopes to destroy or disrupt in an effort to eliminate or reduce the rate of development of a disease state. Tentative Approval
Tentative approval is granted to the producer of a generic drug before the patent has expired. The communication from the FDA details the conditions under which the drug may be sold. Marketing is only permitted after all issues of exclusivity have been resolved. Therapy
A therapy is an attempt at remediation of medical condition. Therapy often includes the administration of drugs. Toxicity
Toxicity refers to usually unwanted biochemical processes which damage a biological system. Trade Name (see Brand Name) Warning Letter
A warning letter is a document issued by the FDA to a drug manufacturer or formulator drawing attention to major or repeated and non-addressed findings by the agency at a production site. To assure that a warning letter gets the appropriate attention, they are addressed to the chief executive officer or general manager of a company. Failure to acknowledge and address the issues raised in a warning letter can lead to enforcement action, often severe, which could prevent a company from supply material to the industry for months or years. The FDA maintains a searchable database of companies that have received warning letters from the agency. |
