The 505(b)(2) NDA Survival Strategy For VC, Start-Up Biotech, And Small Specialty Pharma

In today’s difficult financial climate many small,modification of the 505(b)(1) NDA. The
start-up biotech and small specialty pharmadevelopment program is abbreviated because
companies are finding their traditional drugexisting information on safety and efficacy in the
development programs unsustainable. Traditionalpublic domain is used for the 505(b)(2) NDA
programs often include the development ofapproval. Thus the 505(b)(2) usually involves
innovative drugs through the FDA's 505(b)(1) NDAneither non-clinical studies, nor the normal massive
process targeting chronic diseases with a large,clinical studies associated with an NDA, but instead
under -served population. Financial backing for suchusually relies on relatively short and inexpensive
capital intensive programs, the 505(b)(1) requiringbridging studies (bio and/or clinical endpoint studies)
on average $1.4 billion, includes sources fromto relate the safety and efficacy of the new
venture capital, institutional funding, and larger505(b)(2) product to the related NDA product to
pharmaceutical companies. Because the costs ofwhich the bridge is made. Given the relatively low
drug development have risen dramatically incost to bring a 505(b)(2) to market, and the two
recent years, and because the sources of fundingto three years of market protection that this
drug development have greatly diminished, small,strategy provides, low cost, fast to market drug
start-up biotech and specialty pharma companiesdevelopment programs can now be targeted at
are realizing a challenge in obtaining the capitalsomething other than the traditional chronic, large
required to fund their innovative drugindications. For example, more niche indications can
development programs.now be targeted where a 505(b)(1) program
While many small biotech and specialty pharmawould have made no business sense. Thus, the
companies may have enough capital to support 505(b)(2) NDA can provide a shorter and less
their program for the next 12-18 months, thecostly drug development program and therefore
prospects of acquiring additional capital to supportreduce the company’s burn rate and bring a
the program beyond the next 12-18 months isprofitable drug to market more rapidly. Such a
small to non-existent.  The sad fact is, while theprogram will enable the biotech/specialty pharma
company may see progress in the developmentto survive during times of financial crisis. Further,
of their drug in the next 18 months, when the 18there are many small to medium size distributors
months are completed there will be no moreready to market the 505(b)(2) drugs, and in some
capital and the doors of the company will be shutcases, ready to share in the development costs.
and their assets sold for pennies on the dollar. As profits are made through the 505(b)(2)
One solution to the problem is to implement aprograms, and as the financial crisis eases, the
drug development program with a diminishedcapital required to fund the original 505(b)(1)
burn-rate and faster time to market. Such aprograms may return, enabling the biotech to
program can be the 505(b)(2) NDA process. Thethen pursue its original innovative 505(b)(1) drug
505(b)(2) is a type of abbreviated NDA thatprogram. Viewed in this way, the 505(b)(2) NDA
develops a new drug by somehow modifying anprogram for biotech/specialty pharma can be
existing, approved drug. Unlike a generic drugregarded not only as a possible long-term
(using the ANDA process where an NCE isstrategy, but more importantly as an interim
exactly copied), the 505(b)(2) NDA is asurvival strategy for our current financial crisis.