PDUFA
Prescription Drug User Fee Act
The law that sets deadlines for the FDA to review drug applications. The "PDUFA date" is the target date the FDA must decide to approve or reject a drug. This is the most important date for biotech traders.
Key Catalyst
NDA
New Drug Application
A formal request submitted by a company to the FDA asking for permission to sell a new drug in the U.S. Small molecule drugs (pills, tablets, capsules) go through the NDA process.
Filing Type
BLA
Biologics License Application
Similar to an NDA but for biological products — things like gene therapies, vaccines, cell therapies, and protein-based drugs. BLAs are common in cutting-edge biotech.
Filing Type
CRL
Complete Response Letter
The FDA's way of saying "not yet." A CRL means the FDA won't approve the drug in its current form and lists what needs to be fixed. Stocks typically crash 40–80% on a CRL. NOT a permanent rejection — companies can resubmit.
Bearish Signal
sNDA / sBLA
Supplemental NDA / Supplemental BLA
When a drug is already approved but the company wants to add a new use, dosage, or patient group. Less risky than a first-time approval because the drug's safety is already established.
Lower Risk Filing
FDA
Food and Drug Administration
The U.S. government agency that reviews and approves drugs before they can be sold to the public. Their decision on a drug can make or break a biotech stock overnight.
Regulator
AdCom
Advisory Committee Meeting
A panel of independent medical experts that the FDA sometimes consults before making a drug decision. The committee votes publicly — a positive vote usually sends stocks up even before the official PDUFA date.
Pre-Decision Signal
Priority Review
Priority Review Designation
FDA fast-tracks reviews for drugs that treat serious conditions with no existing treatments. Review time is cut from 10 months to 6 months. A Priority Review designation is a bullish signal — it means the FDA thinks the drug is important.
Bullish Signal
Breakthrough
Breakthrough Therapy Designation
The FDA's highest level of support. Granted when early clinical evidence shows a drug may offer a major improvement over existing treatments. Companies with this designation get extra FDA guidance and faster reviews.
Very Bullish
Orphan Drug
Orphan Drug Designation
Designation for drugs treating rare diseases affecting fewer than 200,000 people in the U.S. Companies get tax credits, 7 years of market exclusivity, and faster FDA review. Big profit potential with less competition.
Bullish Signal
Phase 1/2/3
Clinical Trial Phases
The 3 stages of human drug testing before FDA submission. Phase 1 = safety in small group. Phase 2 = effectiveness + dosing. Phase 3 = large-scale pivotal trial. Positive Phase 3 data = NDA/BLA filing = PDUFA date.
Trial Stages
Market Exclusivity
Market Exclusivity Period
A period where no generic drug can compete with an approved drug. Standard is 5 years for new drugs, 12 years for biologics, 7 years for orphan drugs. Longer exclusivity = more profit potential for the company.
Moat Signal
280E
IRS Tax Code Section 280E
A tax rule that prevents cannabis companies from deducting normal business expenses because marijuana is still federally illegal. This crushes profitability. Rescheduling marijuana would eliminate 280E — instantly making cannabis companies far more profitable.
Cannabis Burden
REIT
Real Estate Investment Trust
A company that owns income-producing real estate and is required to pay at least 90% of taxable income as dividends. IIPR is a cannabis REIT — it owns grow facilities and leases them back to cannabis companies, collecting rent like a landlord.
Company Type
MSO
Multi-State Operator
A cannabis company that operates dispensaries, cultivation, and processing across multiple U.S. states. MSOs are the big players in U.S. cannabis — companies like Trulieve, Green Thumb, and Curaleaf. Most trade on OTC markets due to federal restrictions.
Cannabis Term
Form 4
Statement of Changes in Beneficial Ownership
An SEC filing that insiders (executives, directors, 10%+ shareholders) must submit within 2 business days of buying or selling company stock. Insider BUYING = bullish signal. Multiple Form 4 buys before a PDUFA date = insiders are confident. Watch these closely!
Key Insider Signal
Form 3
Initial Statement of Beneficial Ownership
The first filing a new insider must submit within 10 days of becoming an officer, director, or 10%+ shareholder. Multiple Form 3s filed at the same time signals a leadership change or new major investors entering a company.
Insider Filing
Short Interest
Short Interest / Short Float %
The percentage of a stock's shares currently being "shorted" — bet against by traders expecting the price to fall. High short interest (above 20%) + positive news = potential short squeeze, where shorts are forced to buy shares to cover losses, sending the price flying.
Squeeze Setup
Float
Public Float
The number of shares actually available for public trading. A LOW float means fewer shares available — so when buyers come in, the price moves fast and big. Low float + catalyst = explosive moves in both directions.
Volatility Factor
OTC
Over The Counter
Stocks that trade directly between buyers and sellers rather than on a major exchange like NYSE or NASDAQ. Most U.S. cannabis companies trade OTC because federal illegality bars them from major exchanges. OTC stocks have less regulation and less liquidity.
Market Type