New indications is a term used by pharmaceutical companies to highlight new evidence suggesting that there may be additional applications for an existing drug or medical procedure. This type of development is eagerly followed by investors through press releases on companies’ investor relations pages.
Key Takeaways
- New indications suggest an existing drug may have a broader range of medical uses than previously thought.
- Repurposing existing drugs is often more cost-effective than developing new ones from scratch.
- Investors view new indications optimistically, expecting access to new revenue streams at lower costs.
Understanding New Indications
New indications are early indicators that a specific drug or procedure may hold potential for further investment. For instance, a company having regulatory approval for a drug would report new indications if research suggests additional applications are possible. Investors see these indications as promising since they could signal new revenue opportunities for the company’s existing drugs.
In the United States, companies must navigate a rigorous, often lengthy process to bring new drugs to market. The Food and Drug Administration (FDA) oversees the development and approval of new drugs via the New Drug Application (NDA) process. This procedure typically spans years, with some cases extending over a decade. Despite the duration, only about 30% of new applicants get their NDAs approved.
Important
Though repurposing existing drugs can cut research and development (R&D) costs, significant expenses are still associated with securing final FDA approval for these repurposed drugs. However, since these drugs have already passed through the FDA’s NDA process, they are often seen as lower-risk investments compared to developing new drugs from scratch.
For this reason, one of the most efficient methods for pharmaceutical companies to break into new markets is by finding new or expanded applications for their FDA-approved products. In fact, some companies focus expressly on repurposing approved drugs to expedite the commercialization of new medicines.
Real-World Example of a New Indication
New indications frequently appear in news releases from medical and pharmaceutical companies concerning their drugs or equipment. For instance, on Aug. 16, 2018, the FDA announced a new indication approval for the drug Opdivo (nivolumab), targeting cancers such as advanced melanoma, renal cell carcinoma, and squamous cell carcinoma of the head and neck.
Originally approved in December 2014 with a narrower scope, targeting patients with advanced melanoma that was unresponsive to other treatments or unresectable, the new indication allowed the drug entry into a larger market than previously anticipated.
Related Terms: drug repurposing, regulatory approval, commercialization, investor relations.
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”.
