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Yesterday, the FDA granted Fast Track status to BioCryst’s (ticker: BCRX) influenza drug, peramivir. Investors were overjoyed by the news, sending the stock up 18% on the day. Was the market’s reaction to the news rational? Is a Fast Track designation worth $90 million? Investors seem to think so – that’s how much they added to BioCryst’s market capitalization on the news.

To address the question of the value of Fast Track designation, let’s first look at what “fast track