The US Food and Drug Administration's plan to decrease preclinical animal study requirements for investigational new drug applications could be positive for the biotech sector as it may further encourage innovation, RBC Capital Markets said in a note emailed Friday.
Antibody innovators like Regeneron Pharmaceuticals (REGN), Amgen (AMGN), Viridian Therapeutics (VRDN), BeiGene (ONC), Xencor (XNCR), and Ultragenyx Pharmaceutical (RARE) stand to benefit the most from the new approach, the note said.
RBC analysts said the move toward "increased regulatory flexibility" represents a "net positive, especially given recent concerns about potential FDA dysfunction and potentially greater stringency."
However, this "will likely start small, and we are likely still years away from these specific approaches being proven and implemented on a broad enough scale to significantly affect the group," the note said.
The regulatory move may be especially beneficial for "early-stage development/new company creation, and reducing development time and costs -- particularly practical in situations such as for [monoclonal antibodies,]" the note said.
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