Regulation of drug development

Translation: Original published in Finnish on 11/20/2024 at 8:19 am EET.

The third part in our series of articles on investing in Life Science companies deals with regulatory issues (see previous parts: Clinical phases of drug development and Probabilities of success). Regulatory processes are demanding and time-consuming, and failure to comply can be disastrous for a drug development company. In our view, investors should therefore understand the basics of the regulatory processes in order to be able to understand companies' communications on their drug development progress.

Working with authorities is an integral part of the drug development process

Drug development is heavily regulated to ensure the tolerability, safety and efficacy of a drug candidate. Drug development companies primarily generate the data needed to assess efficacy and safety in a clinical development program, based on which the regulatory authority may ultimately grant marketing authorization for the drug. Companies work with regulatory agencies at different stages of drug development. In this article, we try to summarize the key elements of this interaction. We focus mainly on the process at the US Food and Drug Administration (FDA), as many European companies also prioritize the US because of its large unified market and higher achievable prices. Our understanding is that the process at the European Medicines Agency (EMA) is largely similar, although there are certain differences.

Prior to clinical trials, an IND application is submitted for the investigational new drug

Before a drug candidate is administered to humans for the first time, the drug development company must obtain approval from the FDA through an Investigational New Drug (IND) application. The IND application includes the results of preclinical animal studies and information on the manufacturing quality and consistency of the product. In addition, the FDA will review the detailed protocols for the first clinical trials. The purpose of the IND review is to assess whether human subjects may be exposed to unnecessary risks. The FDA does not release information related to applications at this or any other stage. Once an application has been submitted, companies typically communicate the submission and/or approval to investors through investor presentations or press releases.

Marketing authorization application critical to market access

In addition to the review of the IND application, another required FDA process is the review of the marketing authorization application. For small molecule drugs (chemically synthesized "traditional" drugs), the marketing authorization application is called a New Drug Application (NDA), and for biological drugs it is called a Biologics License Application (BLA). Biological drugs include proteins, antibodies, cell products and vaccines. Examples of small molecules developed by companies in our coverage include Orion's Nubeqa and Herantis' HER-096. An example of a biological drug is Faron's bexmarilimab (antibody).

The processes for handling these two categories of applications are largely similar, although they are processed by different FDA divisions. In an NDA/BLA application, the drug development company must demonstrate that the product is sufficiently effective and safe for commercialization. The company provides the FDA with all relevant clinical data to assess efficacy and safety. In response to an application, the FDA can either grant marketing authorization or respond with a Complete Response (CR) letter, which in practice means that the application is denied. Typically, the rejection is due to deficiencies in efficacy and/or safety. However, it may also be due to issues outside of the clinical trial results, such as deficiencies in the manufacturing of the product. In response to the CR letter, the drug development company may request a meeting with the FDA and then correct the deficiencies or withdraw the application from review. The FDA does not disclose the sending of CR letters or their contents. However, information about approved drugs can be found on the FDA website.

Meetings with the FDA throughout the process

The drug development company may request a formal meeting with the FDA at any stage of the process. The meeting provides an opportunity to receive feedback on the design of the clinical development program. Typical points in the process where a meeting is requested are prior to submission of an IND or NDA/BLA application and after Phase II clinical trials. In the latter case, the goal is to ensure that the future pivotal Phase III trial has a study design that will allow the regulatory authority to grant marketing authorization in the future.

Companies may also request a Special Protocol Assessment (SPA) meeting to reach formal agreement on the size and study design of a future pivotal trial (Phase III) in order to support a future marketing authorization application. An approved SPA can also be rescinded if there are problems with the trial after it has started. However, this has been rather rare statistically. As in the previous cases, disclosure of information regarding SPA is based on the company's voluntary decision.

FDA special programs

During drug development, companies can apply for FDA programs designed to expedite or facilitate the marketing authorization process. Below we provide a brief description of the programs, and more information is available on the FDA website.

Accelerated Approval: Allows marketing authorization applications for certain indications with high medical needs based on intermediate results of a clinical trial. Companies are typically required to conduct a post-marketing study to confirm efficacy and safety (Phase IV clinical trial).

Breakthrough Therapy: A program that can be accessed, e.g., on the basis of initial effectiveness or evidence of improved safety. For example, data on increased life expectancy from an early clinical trial may provide access to the program. Breakthrough Therapy status means that the company will receive the benefits of Fast Track status (see below) and a commitment from the FDA to provide close guidance and feedback as early as Phase I clinical trials.

Emergency Use Authorization: An authorization that may be granted for an unapproved product for which there is a significant public health or military need. For example, a number of COVID-19 vaccines and diagnostic tests received this status, which in turn enabled a rapid response to the pandemic.

Fast Track: A drug development program can qualify for Fast Track if there are no existing treatments for the condition or if the drug has clear advantages over existing treatments, such as superior efficacy or fewer side effects. In practice, access to the program means the opportunity for closer-than-usual communication with the FDA. The NDA/BLA application may also be reviewed on a rolling basis, rather than having to be submitted in its entirety for review. This can speed up the application process.

Priority Review: A project may qualify for the program if the drug candidate has demonstrated significantly greater efficacy or safety than existing treatments. Priority Review means that an NDA/BLA marketing authorization application will be processed more quickly than usual.

 

Sources used in this article:

www.fda.gov accessed November 19, 2024.

Frank S. David. The Pharmagellan Guide to Analyzing Biotech Clinical Trials. Pharmagellan, 2022.