What Are the New Indications?
New indications indicate that a current drug or procedure may have new uses. Investors pay close attention to this kind of news and can find it in the press notes companies post on their investor relations pages.
How do the new signs work?
New indications are an early sign that a drug or treatment might be worth putting more money into. Another example is a business that has already gotten regulatory approval for a drug and would report new indications if their research shows that it could be used in other ways. By this reasoning, most investors see new indications as good because they could mean more ways for a company to profit from its current drugs.
For companies in the US to get new drugs on the market, they have to go through a strict and lengthy process. The Food and Drug Administration (FDA) uses the New Drug Application (NDA) process to monitor how new drugs are made and approved. Usually, the process takes years to finish, and sometimes it takes over a decade. Even though the process takes a long time, only about 30% of new applicants get their NDAs accepted.
In some ways, reusing a current drug can save money on research and development (R&D), but getting FDA approval for these drugs still costs a lot. Despite this, many businesses see these drugs as a safer investment than making new drugs from scratch because they have already been through the FDA’s NDA process.
Because of these reasons, one of the best ways for drug companies to enter new markets would be to find new or expanded uses for goods that the FDA has already approved. Some businesses focus on finding new uses for drugs that have already been approved to get new medicines on the market faster.
Example of a New Indication in the Real World
In news releases for medical treatments and drug companies, new indications are often used to talk about drugs or tools used. Opdivo (nivolumab), for example, was given a new indication approval by the FDA on August 16, 2018. This drug helps with cancers like advanced melanoma, advanced renal cell carcinoma, and advanced squamous cell carcinoma of the head and neck.
When it was first released in December 2014, this drug was only meant to be used on people with severe melanoma that could not be removed through surgery, or that did not respond to other medications.
Conclusion
- When news shows that a current drug may have a broader range of medical uses, this is called “new indications.”
- This kind of reuse of current drugs can be cheaper than making new ones from scratch.
- Often, investors see new signs as a good sign because they think the company will be able to get new sources of income for a low price.
