RE:De Novo 510(k) process and approval date expectations I am reposting this analysis I completed in late January, but I updated it for the FDA's Request for Additional Information.
The request for additional information was announced on January 25th and it was submitted by Helius on March 14th. It took 48 days for Helius to respond, or 34 working days. This compares to the 180 days deadline imposed by the FDA.
My original thesis assumed that none of the other approvals received such requests and that the 139 days average was purely FDA review time. As such adding the 34 days to the average of 139 days is a conservative approach, which would get us to 173 days in total. Under the old timeline, 173 days would get us to February 25th, which is already passed.
The below updates are for pure FDA review time (stopping the clock), and comparable to the FDA guidance. The odds of an approval very soon are quite high. Hopefully we can some short covering in the meantime driving the price up before the FDA announcement which will make the stock gap up.
December 3rd: FDA guidance upper bound of 90 days
December 31st: lower bound of 118 days
January 2nd: average FDA guidance of 120 days
January 21st: average review time of 139 days
March 21st : FDA guidance upper bound of 150 days
April 2nd: upper bound of 161 days
Calendar Days:
September: 26 days (26 days)
October: 31 days (57 days)
November: 30 days (87 days)
December: 31 days (118 days)
January 25th (143 days) --- Request for Additional Information
February: (143 days)
March 14th (143 days) --- Response Submitted
March: 31 days (159 days)
April: 30 days (189 days)
May: 31 days (220 days)
Prokofiev
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The FDA application which Helius Medical filed on September 4th is part of the 510(k) process. A 510(k) is the technical dossier required by the FDA to sell a medium-risk (class II) medical device in the United States. The 510(k) review is focused on substantial equivalence to a predicate (i.e. a product already cleared for sale in the US. This is in contrast to a PMA (Premarket Approval) where the FDA evaluates the safety and effectiveness of the device.
The de novo 510(k) pathway was added to address novel devices of low to moderate risk that do not have a valid predicate device (essentially skipping the PMA). In this case, both the de novo and the 510(k) applications are combined into a single application.
The FDA suggests an approximately 90- to 150-day review process for de novo to 510(k) submissions. While the FDA mentions that the average time for approval is 120 days (the average of 90 and 150), the actual average time for approval is closer to the high end of this range.
I have combed through all the 510(k) approvals since October 1, 2018. I have limited my research to approvals that would be closest to the Helius’ application.
Application type: Traditional 510(k)
Regulation Medical Specialty: Neurology
510k Review Panel: Neurology
I did exclude 6 approvals from the list:
Shenzhen OSTO Technology Co. Ltd. (441, 443 days) - Same Chinese company, every approval has a very long approval time.
Cranial Drills (410, 404, 127 days) – The 127 days was for a “simple cranial drill”
Computerized Behavioral Therapy Device for Psychiatric Disorders (374 days)
From the remain approvals, I was able to derive the following statistics at 95% confidence level:
- Average time to review: 139 days
- Margin of error: 21 days
- Upper bound: 161 days
- Lower bound 118 days
Given Helius submitted its application on September 4
th we get the following target dates based on the derived statistics:
December 3
rd: FDA guidance upper bound of 90 days
December 31st: lower bound of 118 days January 2
nd: average FDA guidance of 120 days
January 21st: average review time of 139 days February 11
th: FDA guidance upper bound of 150 days
February 22th: upper bound of 161 days Therefore, we are now past the middle point, and the odds of getting an approval any day between now and February 22
nd are extremely high.
Prokofiev
Calendar Days: September: 26 days (26 days)
October: 31 days (57 days)
November: 30 days (87 days)
December: 31 days (118 days)
January: 31 days (149 days)
February: 28 days (177 days)
March: 31 days (208 days)