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• Analyzing the impacts of FDA Breakthrough Therapy Designation. • This study unveils intriguing economic and developmental outcomes for biotechnology and small pharmaceutical companies. • There is the potential for significant short-term share price jumps and improved approval rates. • Cautionary insights into long-term market performance are discussed. Biotechnology and small pharma companies must recognize the opportunity presented by FDA Breakthrough Therapy Designation (BTD) to expedite drug development for serious conditions. This paper evaluates BTD economic and developmental impacts on such companies. Analysis of 29 BTD events from 2017 to 2022 revealed immediate share price boosts and improved drug approval rates, alongside faster development times. Yet, long-term share prices underperformed relative to the broader market, underscoring the persistent risks in pharma investments. Although offering new insights, the limited sample size calls for further investigation. [ABSTRACT FROM AUTHOR]

• Unveiling the impact of the FDA's orphan drug designation (ODD) on small pharma: a tale of significant short-term gains and complex long-term performance. • This study provides insight in-to how regulatory milestones can affect the financial landscapes of the small pharmaceutical companies. This analysis explores the impact of the FDA's orphan drug designation (ODD) on biotechnology companies' share prices in the short and long term. Our analysis reveals that there is a significant immediate increase in share prices following an ODD announcement, which underscores its potential as a robust indicator of short-term investor returns. However, the long-term findings present a more complex picture, with a sustained impact within the biotech industry but a significant depreciation against the broader market over time. These findings elucidate the nuanced effects of regulatory milestones on the financial performance of pharmaceutical companies and highlight the need for more comprehensive studies to further unravel these complex dynamics. [ABSTRACT FROM AUTHOR]

• This study delves into the financial implications of the FDA's Fast Track Designation (FTD) on biotechnology companies. • This study provides a compelling analysis of significant share price boosts following FTD announcements, offering crucial insights for investors and industry practitioners alike. This study examines the effect of the FDA's Fast Track Designation (FTD) on biotech company share prices. Using an event-study approach on 25 FTD announcements between June 2019 and June 2020, notable short- and long-term share price hikes were observed, with a 5-day cumulative average abnormal returns of 21.59%, 30-day at 38.34%, 1-year at 76.64% and 3-year at 111.37% against the XBI benchmark. These surges surpass prior research findings, indicating stronger investor reactions. The role of the COVID-19 pandemic as a confounder is discussed. Although the sample size is limited, the results offer valuable insights for investors and small pharma firms. Further research is recommended to delve into the driving market factors. [ABSTRACT FROM AUTHOR]