New indications refer to new evidence suggesting that there may be new applications for an existing drug or procedure. This kind of news is keenly tracked by investors, who often find such findings through the press releases issued on companies’ investor relations pages.
Key Takeaways
- New Indications: News indicating that an existing drug may have a broader range of medical applications.
- Cost Efficiency: Repurposing existing drugs can be less costly than developing new drugs from scratch.
- Investment Signal: Investors often see new indications as a positive signal, anticipating new revenue streams for the company.
How New Indications Work
New indications are an early sign that a particular drug or procedure might be worth further investment. For example, a company with an already approved drug would report new indications if their research suggests additional applications for that drug. New indications are seen as a positive development because they could imply more revenue opportunities for existing drugs.
In the United States, getting new drugs to market involves a rigorous and lengthy process, which is overseen by the Food and Drug Administration (FDA). The New Drug Application (NDA) process can take years and only about 30% of applicants get their NDA approved.
Important
Repurposing existing drugs can reduce research and development (R&D) costs, although there are still major expenses in obtaining final FDA approval. Since these drugs have already passed through initial NDA processes, they are often seen as a less risky investment compared to developing new drugs entirely from scratch.
This method of finding new applications for already approved drugs is one of the most efficient ways for pharmaceutical companies to expand into new markets. Some companies even specialize in drug repurposing to speed up the commercialization of new medicines.
Real-World Example of a New Indication
New indications often appear in news releases for medical treatments and pharmaceutical companies. For instance, on Aug. 16, 2018, the FDA approved a new indication for the drug Opdivo (nivolumab), which treats cancers like advanced melanoma, advanced renal cell carcinoma, and advanced squamous cell carcinoma of the head and neck.
Originally approved in December 2014, Opdivo was intended for a more narrow range of conditions. The new indication expands its market reach significantly, representing an opportunity for the drug to enter a broader addressable market than previously anticipated.
Related Terms: FDA approval process, drug market, investor relations, commercialization.
References
- U.S. Food and Drug Administration. “Step 3: Clinical Research”.
- U.S. Food and Drug Administration. “FDA Grants Nivolumab Accelerated Approval for Third-Line Treatment of Metastatic Small Cell Lung Cancer”.
- Opdivo. “Opdivo”.
- National Institutes of Health. “Opdivo (Nivolumab): Second PD-1 Inhibitor Receives FDA Approval for Unresectable or Metastatic Melanoma”.
