Sagient Research Systems, a publisher of independent research for the financial services and institutional investment communities, has issued a research report documenting a significant decline in FDA Drug Approvals in 2007.
According to its biotechnology research service BioMedTracker, the FDA's drug approval rate declined 13 percent in 2007, while the rate of approvable letters issued increased by 40 percent and non-approvable letters increased by 22 percent. An approvable letter is issued when more data is required before the FDA will approve a new drug, which is viewed as a negative since it requires a delay in the approval process.
According to Sagient's event tracking service, CatalystTracker, the average absolute stock price change resulting from an approvable letter issuance dropped to 12.89 percent in 2007 from 21.42 percent in 2006.
On the FDA drug approval rates, Michael Hay, Senior Analyst and Product Manager for BioMedTracker said, “The FDA has received a lot of criticism over several high profile adverse events cases including Vioxx, Tysabri and Avandia. This has triggered an overly cautious approach to new drug approvals at the FDA. Other potential reasons for the decline in approval rates cited in our report include an increase in adverse event reports, increased workload for FDA employees, and a high rate of turnover at the FDA…If the trend holds true through 2008 we may see a paradigm shift in the way institutions approach FDA decision events in the biotech and pharmaceutical sectors.”
For 2008, CatalystTracker expects 68 decisions on new drug applications (NDA)/new biologics applications (BLA) and 41 decisions on supplemental applications.