FDA and Regulatory Terms
NDA (New Drug Application)
Formal request for FDA approval of a new small-molecule drug. This is the final regulatory step before a drug can be marketed. The FDA has 10 months (standard) or 6 months (priority review) to issue a decision.
BLA (Biologics License Application)
Same as NDA but for biologics — antibodies, vaccines, gene therapies, and cell therapies. Biologics are regulated under a different pathway but the review timeline is identical.
PDUFA Date
The FDA’s target action date for an NDA or BLA decision. Named after the Prescription Drug User Fee Act. This is the single most important date in biotech catalyst trading — the day the FDA says yes, no, or “try again.”
CRL (Complete Response Letter)
The FDA’s formal rejection of a drug application. A CRL states the application cannot be approved in its current form and lists the deficiencies that must be addressed. Stocks typically drop 40–70% on a CRL.
AdCom (Advisory Committee)
A panel of independent experts who vote on whether to recommend approval of a drug. The FDA follows AdCom recommendations ~75% of the time. AdCom meetings are binary catalyst events — the vote is live and public.
Breakthrough Therapy Designation
Given to drugs with substantial preliminary evidence of improvement over existing therapies. Enables more intensive FDA guidance, rolling review, and organizational commitment. A positive signal but not a guarantee of approval.
Fast Track Designation
Allows rolling submission for drugs targeting serious conditions with unmet medical need. The company can submit completed sections of the application as they’re ready, rather than waiting to submit all at once.
Priority Review
Shortens the FDA review timeline from 10 months to 6 months. Granted when a drug offers a significant improvement in safety or effectiveness. Doesn’t change the approval standard — just the speed.
REMS (Risk Evaluation and Mitigation Strategy)
A safety plan required for drugs with known serious risks. Can include medication guides, restricted distribution programs, or mandatory patient registries. Adds compliance cost but doesn’t prevent approval.
Form 483
An FDA inspection report listing deficiencies found at a manufacturing facility. Serious 483 findings can delay or derail drug approvals if the company can’t demonstrate manufacturing quality.
Clinical Trial Terms
Phase 1
First-in-human trials with 20–80 volunteers. Tests safety, tolerability, and dosing. Not designed to prove efficacy. Failure rate is relatively low (~30%) since the bar is just safety.
Phase 2
Tests effectiveness in 100–300 patients with the target disease. Establishes proof-of-concept and refines dosing. ~50% failure rate. Positive Phase 2 data is the catalyst that turns a speculative biotech into a serious contender.
Phase 3
Definitive pivotal trials with hundreds to thousands of patients. The data the FDA uses to make approval decisions. Highest-impact catalyst events in biotech. ~40% failure rate even at this late stage.
Primary Endpoint
The main measurement a trial must hit to be considered successful. Pre-specified before the trial begins. Missing the primary endpoint almost always means the drug will not be approved.
Secondary Endpoints
Supporting measurements that provide additional evidence. Important for labeling claims but not sufficient on their own. A drug that hits secondaries but misses the primary is still a failure.
p-value
Statistical significance threshold. A p-value below 0.05 means there’s less than a 5% chance the result occurred by random chance. The lower the p-value, the stronger the statistical evidence.
Overall Survival (OS)
The gold standard endpoint in oncology — measures how long patients live. Hardest to achieve but most meaningful. Trials powered for OS take longer but produce the strongest approval case.
Progression-Free Survival (PFS)
Measures how long patients live without their disease getting worse. Used as a surrogate for overall survival in cancer trials. Faster to measure than OS, so trials read out sooner.
Market and Trading Terms
Binary Event
An event with two distinct outcomes producing dramatic stock moves. PDUFA dates are the classic binary event: approval sends the stock up 30–80%, rejection sends it down 40–70%. No middle ground.
Bio-Score™
BioCatalysts.AI’s proprietary algorithm that ranks catalysts by predicted volatility magnitude — not direction. A high Bio-Score means the event will produce a large stock move, regardless of whether it’s up or down.
Short Interest
The total number of shares currently sold short. High short interest (above 20% of float) amplifies catalyst moves in both directions — shorts covering on good news creates a squeeze, shorts piling on bad news accelerates the decline.
IV (Implied Volatility)
The market’s forecast of how much a stock will move, derived from options pricing. IV spikes before catalysts and collapses after (“IV crush”). High IV means options are expensive because the market expects a large move.
RVOL (Relative Volume)
Current trading volume compared to the historical average. An RVOL of 5x means the stock is trading at five times its normal volume — a sign of unusual activity often preceding or following a catalyst.
ATM Straddle
An options position that buys both a call and put at the current stock price. The cost of the ATM straddle represents the market’s estimate of the expected move size around a catalyst event.
Peak Sales
The maximum projected annual revenue for a drug, typically reached 5–8 years after launch. Blockbuster status is $1B+ per year. Peak sales projections are the foundation of pre-revenue biotech valuation.
Pipeline
The collection of drugs a company has in various stages of development, from preclinical through regulatory review. A deep pipeline with multiple late-stage assets reduces single-catalyst risk.
Pro Tip
Bookmark this page. You’ll find yourself coming back to it every time a headline drops an unfamiliar acronym. The difference between an NDA and a BLA, or between OS and PFS, can mean the difference between understanding a catalyst and missing it entirely.
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