Definition: In the pharmaceutical industry, the term "pipeline" is frequently used when describing and evaluating a biotechnology company's activities, research and development progress and overall potential for success and growth. The pipeline refers to the series of clinical tests that a new drug, or other biotech product, must pass through before being approved for sale and/or public use. It is the number of unique products or processes reported or in development by a company.
Drugs that have entered into clinical trials and are pending FDA approval are said to be "in the pipeline". A company that has several drugs in various stages of development has multiple products in the pipeline. Likewise, a product in the pipeline is one that we can anticipate hearing more about and, possibly using, in the future.
A biotech company's pipeline of up-and-coming products is a critical factor in evaluating its investment potential. Therefore, market analyst's reports on company pipelines are an important investment tool. However, the value of each individual pipeline drug depends upon its progress through clinical trials and, ultimately, approval. When evaluating a company pipeline, each drug is assigned a weighted value which increases as it progresses through these trials.
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