Like all industries, biotech has its own jargon. Newcomers to the sector can find themselves struggling to get through just one paragraph of a press release without having to look up several terms.
Here is a primer on some of the key phrases, acronyms or statistical concepts that you'll need to know when investigating a biotech stock idea.
ANDA -- Abbreviated New Drug Application. This is an application to the Food and Drug Administration (FDA) to seek approval of a generic drug.
NDA -- New Drug Application. This application seeks approval for a new drug before commercialization. Included in the NDA is safety and efficacy data, proposed labeling and manufacturing methods.
IND -- Investigational New Drug. This is the process in which companies apply to the FDA for permission to begin trials of a new drug in humans. Pharmion announced last week that the FDA accepted the company's IND for an oral version of Vidaza, a treatment for patients with myelodysplastic syndromes. The new drug will enter phase I trials shortly.
It's also important to keep in mind that drugs can be in different phases for different diseases. For example, Genentech's Avastin is approved for colorectal and non-small-cell lung cancer. However, the drug is in or about to begin phase III trials for a host of other cancers, including first-line metastatic breast cancer and first- and second-line ovarian cancers. Avastin is being prepared to enter phase II for extensive small-cell lung cancer.
P-value -- A measure of how statistically significant a trial's results are. In other words, it's the percentage chance that a result is not true. The standard "line in the sand" p-value is 0.05, meaning 5%. Results with a p-value of greater than 0.05 are considered statistically insignificant. The results have a greater than 5% chance of being false.
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