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As a long-time biotechnology investor, I have grown accustomed to the politics and the sluggish nature of the FDA, and the vigorous process for a candidate to gain marketing approval. I have held biotechnology stocks in every possible situation, from the first day of a Phase 1 trial, all the way to an FDA approval; I've sometimes felt the defeat of a complete response letter, but also the victory of an approval. I saw value in companies such as Questcor Pharmaceuticals (QCOR), Jazz Pharmaceuticals (NASDAQ:JAZZ), and Spectrum Pharmaceuticals (NASDAQ:SPPI), but have also held the likes of several disappointments, while promising drugs fail to reach potential and investors are left wondering what may have been. As a result, I think it is safe to say that I have been there, done that, and seen just about everything in regard to biotechnology.

I have always said that investing in biotechnology is unlike any other class of securities in the market. It is almost like real estate vs. buying shares of Apple (NASDAQ:AAPL). Well, maybe not that extreme, but when you buy stock in a developmental biotechnology company, the stock will not be driven by top and bottom line sales, but rather speculation, potential, and even headline news that could either increase, decrease, or sometimes have no meaning at all in regard to a drug's chances of approval. As a result, it is a very dangerous space to trade in, but for patient investors it is often very rewarding.

The ultimate thrill for a developmental biotechnology investor is when a company that you've owned for many years, and with which you have endured all the ups and downs, finally gets its day in the sun, and is awarded that prestigious FDA marketing approval, or receives a patent for an innovative technology. At that point all the volatility pays off, and you can sleep at night with a big smile on your face. But unfortunately the process takes way too long. A company must complete at least three trials, and then sometimes further testing to deem it safe for use.

In the last three years I have watched as the biotechnology space has created a sense of excitement, unlike any period over the last decade. The reason is the new innovative transcendent technologies that have the capability of effectively fighting some of man's most deadly diseases. But once again, the path is long, and despite the technology being present, a company must still jump through all the necessary hoops, to ensure all its "i's" are dotted and its "t's" are crossed for the strenuous process of the FDA.

The good news for both new and old biotechnology investors is that for innovative drugs, this long unnecessary process could become a lot shorter, with fewer regulatory hurdles to cross. The reason being is a new piece of legislation, "The Food and Drug Administration Safety and Innovation Act (FDASIA)", which is in many ways the first step of a major FDA reform; it will promote jobs, innovation, investments, and hope to patients with a wide range of illnesses such as rare life-threatening cancers. It will give the government new performance metrics to accelerate the approval process for drugs that treat certain life-threatening conditions, which will ultimately benefit the patients, physicians, biotech companies, and also the investors.

The approved legislation provides a much simpler guideline to provide patients with access to new medical treatments. In order to achieve the accelerated approval, there are a number of criteria that must be met; therefore, not all drugs would qualify for the program. Still, this new legislation opens the door for many drugs that are in the midst of the FDA process to obtain the fast-track status. The legislation also provides for "breakthrough therapy" designation for drugs, applicable to those that treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development (according to page 94 of the Innovation Act)

For those of you who have followed me for any period of time, you know I believe one of the most promising biotechnology companies in the market is ImmunoCellular Therapeutics (NYSEMKT:IMUC). ImmunoCellular has experienced an incredible year in 2012: It began the year as an over-the-counter stock, but recently uplisted to the NYSE; on Thursday the company will be ringing the opening bell, and it has returned a gain of 135% so far in 2012. The reason for the company's momentum is its lead candidate, ICT-107, that treats glioblastoma, which is among the most deadly forms of cancer. Patients with the disease are lucky to live one year, and only 6% live three years with the disease. ICT-107 is an early phase vaccine; therefore, we still have much to learn. But since its development, 37% of the patients treated have no signs of glioblastoma brain cancer after 44-63 months (compared to 6% after three years with standard care alone). In my opinion, this definitely falls under the category of drugs with considerable improvements over existing therapies.

In order to qualify for the accelerated approval, the drug must be innovative, and ICT-107 fits into a specific category that was mentioned in the legislation of cancer therapies with a targeting approach. Therefore, drugs like ICT-107, in some ways, helped pave the way for this bill to be passed. As a result, how could it not qualify for the accelerated program? Furthermore, the vaccine is the most innovative cancer therapy on the market, with its six antigen targeted approach, compared to the likes of Dendreon (NASDAQ:DNDN) which targets just one antigen with its vaccine Provenge. And since targeting antigens is believed to be the key to a successful vaccine, it appears as though IMUC not only has the best vaccine, but also one that would qualify for this accelerated program.

Over the weekend I took time to familiarize myself with the Act, and read most of the 140 pages included in the FDASIA. On page 90 it discusses why this act was presented and who would benefit from the passing of this bill. Below shows an abridged portion of the Act that basically shows that targeted cancer treatments were significantly important in the wording of this legislation, which means it should be less problematic for truly effective life-saving treatments to reach patients with life-threatening diseases-- a big win for all Americans.

A new generation of modern, targeted medicines is under development to treat serious and life-threatening diseases. As a result of these remarkable scientific and medical advances, the FDA should be encouraged to implement more broadly effective processes for the expedited development and review of innovative new medicines intended to address unmet medical needs for serious or life-threatening diseases or conditions, including those for rare diseases or conditions, using a broad range of surrogate or clinical endpoints and modern scientific tools earlier in the drug development cycle when appropriate. This may result in fewer smaller, or shorter clinical trials for the intended patient population or targeted sub-population without compromising or altering the high standards of the FDA for the approval of drugs. (D) Patients benefit from expedited access to safe and effective innovative therapies to treat unmet medical needs for serious or life-threatening diseases or conditions. (E) For these reasons, the statutory authority in effect on the day before the date of enactment of this Act governing expedited approval of drugs for serious or life-threatening diseases or conditions should be amended in order to enhance the authority of the FDA to consider appropriate without compromising or altering the high standards of the FDA for the approval of drugs.

As an investor, and an advocate for cancer research, I am thoroughly excited about the passing of the FDASIA. In this article I used ICT-107 as an example of a therapy that could qualify for the accelerated approval program, partly because I am certain that it would qualify, and also because it shows the level of innovation that must be present in order to qualify. However, there are a number of companies or candidates that would qualify for this program, some include: NewLink Genetics (NASDAQ:NLNK), Threshold Pharmaceuticals (NASDAQ:THLD), Celldex (NASDAQ:CLDX), and Sunesis Pharmaceuticals (NASDAQ:SNSS). But when it's all said and done, we are still talking about the federal government and the FDA. Therefore, we should know that changes will not be made too abruptly. However, this Act is a huge step in the right direction to getting innovative drugs on the market in a timely manner so that more lives can be saved and investors don't have to endure the endless rants of the FDA.

For the full text of the FDASIA law, click here. And here's commentary from Congressman Fred Upton, R-St. Joseph, representing Michigan's 6th Congressional District in Washington. (The Detroit News).

Disclosure: I am long IMUC, AAPL.

Source: New Legislation Speeds Up FDA Approval Process for ImmunoCellular Therapeutics And Other Innovating Therapies