How a drug gets approved

The path from molecule to approved drug is long, expensive, and mostly fails — which is why each milestone along it is a catalyst.

The steps

• Preclinical — lab and animal testing to justify testing in humans.
• IND (Investigational New Drug) — FDA clearance to begin human trials.
• Phase 1 → 2 → 3 — safety, then efficacy signal, then large confirmatory trials.
• NDA (small molecule) / BLA (biologic) — the marketing application submitted to the FDA.
• Filing acceptance — the FDA agrees to review and assigns a PDUFA date.
• Review — possibly an Advisory Committee; ends in approval or a CRL.
• Post-marketing — Phase 4 commitments and label expansions (sNDAs).

Why most fail

Only a minority of drugs that enter human trials reach approval, and Phase 2 and Phase 3 are the biggest graveyards. That attrition is exactly why a positive pivotal readout re-rates a stock so sharply.