An important part of that directive is to insure that drugs approved for marketing in this country are both safe and effective. The status of a new drug s FDA marketing approval is one of the most critical elements in evaluating many small-cap health care companies, yet many investors are only vaguely familiar with the approval process. The following discussion of the process is designed to help investors put into perspective some of the news flow emanating from small-cap health care stocks of interest.
Basic science provides the foundation for discovery of most new drug compounds.
Scientists study the human body in both its normal and abnormal states. Insights gained through these studies often lead to clues as to possible therapies. New drug compounds emanate from a wide variety of sources. Some of this spending is directed at basic research and some at specific diseases or medical conditions. The range of talent employed by these companies is very broad and often includes organic chemists, physiologists, biochemists, molecular biologists, toxicologists, pharmacologists and computer scientists.