Adial Pharmaceuticals Inc. (NASDAQ:ADIL) registered a modest uptick in its share price after the company pointed to recent federal regulatory commentary that alters the evidentiary expectations for drug approvals. On Monday, Adial’s stock rose 2.9% following the announcement.
The company cited a commentary published February 19, 2026, in The New England Journal of Medicine authored by FDA Commissioner Martin A. Makary and Vinay Prasad. That piece outlined an updated approach to demonstrating clinical effectiveness under Section 505(d) of the Federal Food, Drug, and Cosmetic Act.
Under the newly emphasized policy direction, regulatory approval in certain circumstances may be supported by one adequate and well-controlled clinical investigation supplemented by confirmatory evidence, rather than the longstanding expectation of two independent pivotal studies. The commentary frames this change as a modernization of evidentiary standards that prioritizes the quality of trials and confirmatory support over the raw number of pivotal studies conducted.
Adial said its Phase 3 planning for AD04 had previously been oriented around conducting two pivotal trials. The company indicated that the agency’s updated stance could have material effects on the later-stage program, noting that this direction could significantly lower Phase 3 costs, improve capital efficiency, and speed the route toward submission of a New Drug Application.
AD04 is described by the company as a genetically targeted serotonin-3 receptor antagonist being developed to treat Alcohol Use Disorder in heavy drinking patients. Adial stated it plans to engage with the FDA to determine an appropriate evidentiary strategy for AD04 that aligns with current regulatory standards.
The policy commentary referenced pertains specifically to interpretation of Section 505(d) and emphasizes confirmatory evidence alongside trial rigor. Adial’s public statement connects that regulatory conversation directly to its development strategy and anticipated resource allocation for Phase 3 activities.
Contextual notes
- The company relied on a New England Journal of Medicine commentary by FDA officials to explain the regulatory shift.
- Adial previously planned two pivotal Phase 3 trials for AD04; the agency commentary suggests fewer trials may be acceptable in some cases.
- Adial intends to discuss evidentiary requirements with the FDA to determine the next steps for AD04.