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Something Old, Something New: What is a 505(b)2?

Welcome to Molecular Ideas, and thanks for sharing your time with us today! Today, we explore an interesting angle of pharmaceutical innovation - the 505(b)2 pathway for expedited approval of previously-approved active drug ingredients with new formulations.

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Exploring new drug development opportunities is never easy, but there are always market opportunities. For instance, take a look at these three drugs:

Information pulled from the FDA and

At first glance, these drugs have nothing in common. They were approved for different indications, at different times, and for different patient demographics. Looking closer however, we find two key distinguishing points:

  1. All of them have relatively inconvenient routes of administration.

  2. They have since been superseded by brands following the 505(b)2 pathway from the FDA, with improved formulations that make it easier for patients to adhere to treatment regimens.

Each of the drugs shown above have been matched or superseded on the market by their competitors using this pathway that allows for established active ingredients to be put forward in new formulations.

Information pulled from the FDA and

While new pharmaceutical medications often address a critical unmet need, they often cannot check every box for every stakeholder. For instance, a new compound may be safe, effective, and relatively straightforward to manufacture, but it may not be able to be administered through a pill or oral tablet. Sometimes, the science behind preserving stability in pills and tablets isn't there yet. Other times, the cost of exploring different formulations or routes of administration in the R&D process is financially infeasible. There are always the black boxes of coverage, reimbursement, and pharmacy benefit manager (PBM) intervention. Plus, the financial costs of new drug development remain startlingly high.

Costs of New Drug Development, from: DiMasi JA, Grabowski HG, Hansen RA. Innovation in the pharmaceutical industry: new estimates of R&D costs. Journal of Health Economics 2016;47:20-33.

Weaknesses of new products become market opportunities when viewed through the following lens - 'How can we innovate to lower costs, and/or improve the patient experience?'

The answer may lie in the FDA's 505(b)2 drug approval pathway.

505(b)2s: These ARE the Pharmaceuticals You're Looking for

These aren't droids from Star Wars - the 505(b)2 pathway creates regulatory and financial incentives for continued innovation in the pharmaceutical space. Companies pursuing the development of entirely new drugs bear high costs, long development timelines, and significant risk due to the high burden of proof for their product's safety and efficacy. Drugs approved under the 505(b)2 pathway are different than generics and new drugs because they leverage proven active ingredients within new formulations.

We've put together a helpful table to help visualize the differences.

Simply put, 505(b)2 approvals are distinct from entirely new drug applications (NDAs) because they leverage an already proven molecule, and distinct from generics because they leverage a new formulation.

FDA approval does not mean that the chain of innovation with a particular molecule needs to end. In addition to developing new compounds, existing drugs can always be improved. We can make them cheaper to manufacture, increase stability and shelf-life, or make the formulation easier for patient adherence. Put another way, it's easier to swallow a pill at home than to go get an injection at the hospital. It's cheaper to ship and store a bottle of pills than a vial under cold-chain.

Drugs approved under the 505(b)2 pathway follow this paradigm. While NDA (New Drug Approval) applications leverage entirely new pharmaceutical compounds, the 505(b)2 pathway allows pharmaceutical companies to repurpose drugs previously approved as safe and effective under a new formulation. Created in the Hatch-Waxman Amendments of 1984, the pathway gives the FDA permission to rely on safety and efficacy data not developed by the applicant for previously approved drugs, thus helping avoid unnecessary duplication of studies.

This strikes a unique balance between establishing burden of proof for safety and efficacy while supporting innovation from companies that can focus in on particular patient issues. Approvals via this pathway provide three years of marketing exclusivity if the drug has previously been approved in another form in the U.S. and five years of marketing exclusivity if the drug has never previously been approved in any form in the U.S. As a side note, analogous pathways exist for other regions across the world; this includes the EU's European Medicines Agency (EMA) has a 'hybrid application pathway',

What this means is that we're taking existing (typically off-patent) active ingredients and placing them into formulations that lower costs, improve the patient/healthcare provider experience, or both. As a result, companies with limited capital but significant platform or therapeutic area expertise may be interested in exploring this pathway because of:

  1. Increased speed to FDA approval due to fewer clinical trials being needed

  2. Lower cost due to the smaller scope and comparatively reduced need for the remaining the required studies

  3. Lower risk of safety and efficacy not passing muster due to previous approvals and available post-approval surveillance data

Of course, using proven, off-patent molecules is a double-edged sword. While they are likely cheap to acquire and produce, existing generics drive down prices as substitutes in a mature therapeutic market. Despite the fact that these generics follow a sub-optimal formulation and route of administration, addressing this Achilles heel is crucial to any effective 505(b)2 marketing strategy.

Teaching an Old Drug New Tricks: Case Studies

Let's look at a few case studies that highlight the value of 505(b)2 drugs in development and how they affect various stakeholder outcomes using real-world companies.

Acasti Pharma & Grace Therapeutics with GTX-104 (nimodipine)

Imagine the unthinkable for a moment - you're in a car crash, and rushed to the emergency room. The safety features of your vehicle prevented the worst - at first glance. However, you have suffered significant head trauma and you're at risk for a seizure or other event that may increase your blood pressure. These are the precursors for a subarachnoid hemorrhage (SAH) - a potentially fatal condition. The most pressing care question becomes 'how do we keep this patient's blood pressure and risk for seizures down to prevent the blood vessels in the brain from bursting and causing a brain bleed?'

The standard-of-care here is a compound called nimodipine. First approved by the FDA as Nimotop from Bayer in 1988, this pill reduces the incidence and severity of ischemic deficits in patients with subarachnoid hemorrhage. It was followed up by the oral solution 505(b)2 product, Nymalize, from Arbor Pharmaceuticals, in 2013.

Both of these products use the same active ingredient and have comparable safety and efficacy. They also have a significant flaw when considering the patient population they're serving: they both have an oral route-of-administration.

Why is this a problem? Think about our patient here. If you're unconscious in the ICU, operating room, or trauma ward, how well do you think you can swallow? And if you can't swallow, how can you make sure the drug you need enters your system?

Grace Therapeutics, which was recently acquired by Acasti Pharma, sought to solve this problem with its compound, GTX-104. Instead of being an oral solution, GTX-104 is formulated as a continuous IV infusion. This not only circumvents the 'swallow' problem, but also enables practitioners to better regulate how much of the drug is in a patient's system - meaning that blood pressure doesn't drop too low or get too high. Assuming the data checks out with the FDA, this 505(b)2 could help save as many as 50,000 affected lives every year in one of medicine's highest risk scenarios.

GTX-104 is currently in Phase II clinical trials according to the Acasti Pharma pipeline page as of this writing, with Phase III safety trials expected to begin in 2H 2022.

BioXcel with BXCL-501 (dexmedetomidine)

Imagine you have a loved one suffering from dementia, schizophrenia, or opioid withdrawal. While these are distinct and tragic conditions, they share a key side effect: agitation.

Feelings of agitation are different in these patients than what most of us typically experience in our day-to-day lives. It can range from excessive motor and verbal activity to violent behavior. They can also include hallucinations, delusions, and disorganization brought on by sensory confusion. Agitation as a co-morbidity is a critical unmet need in the treatment of dementia, schizophrenia, or opioid withdrawal. Failing to do so can lead to dangerous consequences for patients, caregivers, and practitioners alike.

One of the most venerated drugs used to treat these symptoms is dexmedetomidine (sometimes called 'dex' for short in clinical settings). Abbot's drug was approved by the FDA in 1999 under the brand name Precedex as an injection.

Let's stop and think for a moment about the patient experience. Are agitated patients suffering from dementia, schizophrenia, or opioid withdrawal likely to sit still for an injection without outside restraint? Probably not. Does that put patients, caregivers, and practitioners at greater risk of injury? You bet. What about the risk for bystanders if the patient is in a non-clinical setting? It's uncomfortably high.

BioXcel's BXCL-501 is indicated for acute treatment of agitation for patients with these conditions. What separates it from the historical injections of dexmedetomidine is that it uses the company's proprietary oral film platform. This allows the drug to be orally absorbed via a film that dissolves on the tongue. If approved, the drug would be far easier to administer in a wider range of settings with comparatively limited risk of injury. Moreover, this drug could be provided at brand name prices for millions of patients, leading to billions of dollars in market value over the course of the product's lifetime.

BXCL-501 has a PDUFA action date for January 5, 2022 and was granted the coveted Breakthrough Therapy status by the FDA, further accelerating approval timelines.

Post-Approval: Strong Sales from 505(b)2s

These successes aren't hypothetical. Time for some recent rapid-fire examples of 505(b)2 products that displaced incumbent competitors.

Data pulled from various equity research and

Key Takeaways

As the cost of developing new drugs grows, so does the need for adapting drugs and drug delivery technologies to meet patient needs. Doing so provides a unique market opportunity driven by powerful patient and practitioner needs. No matter how good your data is in a controlled environment, pharmaceuticals don't work if patients don't take them, or the bioavailability of the drug is compromised by how it is administered in a typical use scenario.

505(b)2s can capture patient-driven revenue and payor incentives by achieving better clinical outcomes. Partnering unique, defendable platform technologies with these proven molecules provides a comparatively lower risk and solid returns versus entirely new drugs (due to longer lead times and higher R&D costs) and generics (due to depressed pricing).

At the end of the day, it comes down to the patient and practitioner experience. The driving unmet need in drug development is not always clinical. Drug development is often driven by scientific researchers asking 'what is the molecular target we need to hit and how can we hit it?'.

Once that's done, remember to ask your patients and practitioners the 5W's. You can save lives and make millions.

That’s all for today! Thanks for spending your time with us. Please share this article, and sign up to leave your thoughts, ideas, and opinions in the comments. Your feedback is always welcome and helps Molecular Ideas grow!


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