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Essential Terminology For The Biotech Investor


Just published for our TPT subscribers, a handy little biopharma dictionary.

The following terms are covered, and the list is regularly updated.

A few examples are provided below. To see the entire regularly updated dictionary, subscribe to TPT.

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Phase 1/2/3:-





Accelerated Approval:-


Breakthrough Designation:-

Orphan Drug status:-

Fast track:-

Priority review:-



505(b)(2) :-






Off-label use:-

OTC drug:-


Form 510(k):-



As opposed to a biologic like a monoclonal antibody, a small molecule drug is an organic non-biologic drug with low molecular weight in the range of a few hundred daltons. It is relatively easier to develop and manufacture, but also equally easy to copy as a generic. Small molecule drugs penetrate cell membrane easily, have generally lower side effects due to their lower immunogenicity, and generally cost a fraction of biologics. Broadly, a small molecule’s non-branded copy is called a generic, while a biologic’s non-branded copy is called a biosimilar or biosim.

Generic drugs:-

Drug Lag and Drug Loss:-


What is a PDUFA?

What are the various catalysts for a biopharmaceutical stock?

What is drug efficacy?



Statistical significance and p-value - Statistical significance or stat sig is widely used in medical research. Simply put, it tells us how likely it is that x caused y, where x is the drug and y is the treatment benefit observed in a trial. It is important to understand that this differs from clinical significance. A drug could have caused statistically significant treatment benefit, but yet may not be clinically significant. This means, it is likely that the drug, not pure chance, caused the treatment benefit. Yet, the benefit was not “good enough” to forego existing treatment methods for this new one. That comparison - that of clinical significance - cannot be done simply by comparing numbers for stat sig. A host of other factors depending on the disease, the patient population, safety, etc, are required to determine clinical significance.

p-value is one of the measures of stat sig. A p-value is a complex statistical parameter calculated from a “chi-square” table. A chi-square table gives a quantified measure of the difference between observed value and expected value for each instance in a trial. In p-value, the “p” stands for probability, the probability that an observed difference happened purely by chance (the null hypothesis). The higher the p-value, the more likely it is that the observed difference - in our case, the treatment benefit - occurred due to chance rather than due to the drug being tested.

For our purpose, what we need to understand is that, in any clinical trial, the p-value is set at 0.05 as the borderline measure for stat sig. Anything lower than 0.05 means it is likely that the drug had benefit. If the p-value is under .01, results are considered statistically significant and if it's below .005 they are considered highly statistically significant.


Overall survival or OS is a key measure in clinical trials, also called the “gold standard” in quantifying therapeutic benefit of a drug, OS measures the time from diagnosis or first treatment to death of the patient.


Intent-to treat population is the total number of patients randomized at the beginning of a trial. Now, in an actual trial, a number of patients may drop out or otherwise fail to complete the trial. If these drop outs are taken into account during the trial analysis, results may be skewed. As an example, let’s consider a trial of two weight loss drugs, one more effective than the other. Now, during the trial, patients in the more effective drug arm may find themselves losing weight quickly, and decide to drop out because they have already achieved weight loss. What remains in this arm are those that did not lose enough weight.

In the other arm with the less effective drug, the opposite happens. Many people don’t have any weight loss at all, and these drop out. A few have just a little weight loss, and continue to remain in hopes of seeing better results. So, in effect, what remains are people who have seen some effect. In the other arm, we will recall, patients that remained were those that saw little effect.

Now, if we do not consider the drop outs, and only analyze the existing population, it may look like the less effective drug is more effective!

That is why, nowadays, all clinical trials use the ITT population; that is, everyone that came in for the trial, irrespective of those that dropped out for whatever reasons. The ITT gives a more randomized analysis.


A monoclonal antibody or mAb is an antibody produced in the laboratory from a single ancestral plasma cell, a type of white blood cell, a part of the immune system, that secrets large quantities of natural antibodies. An mAb can be used to augment the immune system's cancer fighting ability. An antibody binds to an antigen, and antigens are found in larger numbers on the surface of cancer cells. Thus, monoclonal antibodies offer targeted cancer therapy.

Monoclonal antibodies are more difficult to produce than small molecule drugs, and especially fully humanized monoclonal antibodies. Therefore, they are usually more expensive. However, generics of biologic drugs like mAbs are also difficult to produce, so mAbs have that advantage.

Some of the most well known drugs are monoclonal antibodies. MAbs are used to flag cancer cells, deliver cytotoxic agents targeting cancer cells, inhibit angiogenesis or blood vessels necessary for tumor survival, inhibiting immune system inhibitors triggered by cancer cells, or as diagnostic tools.Rituxan, Humira, Avastin and Herceptin are well known monoclonal antibody drugs.