What are New Indications

New indications is a term that medical companies and professionals use to signify that a procedure or drug has been recognized to be advisable or necessary. New indications refer to new applications of an existing prevention, diagnosis or treatment of a disease. It is a positive report provided by credible professionals through established testing techniques. The next step is usually clinical trials before official approval by the country's regulatory association.

BREAKING DOWN New Indications

New indications are often used in news releases on medical treatments and pharmaceutical companies when referring to their drugs or the equipment involved. For example, on April 16, 2018, the FDA released a new indication approval for the drug Opdivo (nivolumab), for the treatment of advanced melanoma, advanced non-small cell lung cancer, advanced renal cell carcinoma, MSI-H or dMMR metastatic colorectal cancer, classical Hodgkin lymphoma, advanced squamous cell carcinoma of the head and neck, urothelial carcinoma and hepatocellular carcinoma. Contrast this to its first approval in December 2014, which was limited to treatment for patients with advanced melanoma that could not be removable with surgery or that no longer responded to other drugs.

New indications need not be approved by the FDA for their adoption and use among medical professionals. In 2017, The Scientist ran a story on an industry that has emerged around repurposing existing drugs for new indications. The story features organizations like CEO Bruce Bloom’s Cures Within Reach, a company that funded 10 drug repurposing projects that sought new indications for existing (or failed) drugs. Forty percent of these projects resulted in recommendations that empowered doctors to resurrect drugs to deliver off-label treatments to patients. There are major costs involved in moving a repurposed drug into a Phase 2 and Phase 3 trials for FDA approval, but many companies are choosing to take on these costs; investments in earlier approvals for the drug have been made, and there is less risk, as those drugs have already been studied extensively in preclinical development.

Relevance of New Indications for Investors

Investors owning shares of pharmaceutical companies should take note when any major new indications are announced for their drugs. New indications for drugs can lead to a potentially higher demand for a given drug because of forecasted additional uses on top of previous ones. This could also signal the underlying company's potentially higher share value. Accordingly, major pharmaceutical companies, such as Pfizer, offer devoted investor news sections on their websites, with press releases that cover FDA approval on new indications for their drugs.