New Drug Application (NDA)

Also known as: NDA, NDA submission, new drug application, 505(b)(2)

A New Drug Application (NDA) is the submission a sponsor files with the FDA to request approval to market a new drug, typically a chemically synthesized small molecule, in the United States. It must show that the drug is safe and effective for its intended use and can be manufactured to consistent quality.

How it works

An NDA compiles everything from development: clinical trial results (usually including Phase 3 data), preclinical studies, pharmacology, manufacturing and controls, and proposed labeling. There are two main pathways under the Federal Food, Drug, and Cosmetic Act:

505(b)(1): a full application based on the sponsor's own studies.
505(b)(2): relies partly on published literature or the FDA's prior findings for an approved drug, common for new formulations or delivery methods.

Within 60 days the FDA decides whether to accept the application for review or issue a refuse-to-file letter. Accepted NDAs get a PDUFA date under standard or priority review. The review may include facility inspections and an advisory committee. It ends in approval or a complete response letter.

Biologics follow the separate BLA pathway, and generics use the ANDA.

Why it matters for traders

Key NDA milestones each produce news: submission, FDA acceptance (which reveals the PDUFA date and review type), any advisory committee, and the final decision. A refuse-to-file letter is relatively rare and can hit a stock hard because it adds months of delay.

Example

A hypothetical biotech, Northwind Therapeutics (NWTX), submits an NDA in January. In March it announces the FDA accepted the filing with standard review. For a new molecular entity, that sets a goal date about 12 months from submission, the following January.

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Related terms

PDUFA dateThe target date by which the FDA aims to approve or reject a new drug or biologic application under the Prescription Drug User Fee Act.Biologics License Application (BLA)The application a company submits to the FDA to market a biologic, such as an antibody, vaccine or gene therapy, in the United States.Supplemental NDA (sNDA)An application to change an already approved drug's NDA, most often to add a new indication, patient population, dose or formulation.Abbreviated New Drug Application (ANDA)The FDA application used to approve a generic drug by showing it is bioequivalent to an already approved brand-name drug.Complete response letter (CRL)A letter from the FDA stating it cannot approve a drug or biologic application in its current form and explaining the deficiencies to fix.Priority reviewAn FDA designation that shortens the review goal for a drug application to 6 months instead of the standard 10 months.

Part of the Quantisnow financial glossary. For longer explainers, see the investing guides. Educational content, not investment advice.