The regulatory approval process can be scary for drug companies and their investors. All of the data, ranging from early-stage clinical trials in college kids taking experimental drugs for beer money to late-stage trials in patients with a disease, has to be submitted to the Food and Drug Administration prior to selling the drug.

The FDA wields incredible power. It has the final say as to whether experimental drugs have been proven safe and effective. As an investor watching from the sidelines, it can be very difficult to guess how the agency will view the data on a particular drug program.

Because of the complexities and importance of the process, it is crucial for small biotech companies to have a management team that has experience in moving drugs through the regulatory steps and onto the market. Poor clinical trial design and/or a deficient strategy for attaining approval are frequent downfalls for small biotechs.

One specialty pharmaceutical company that has developed an amazing track record in getting FDA approval for its drugs is Atrix Laboratories (NASDAQ:ATRX). During the last two years, every submission that the FDA has had time to review has been approved. Atrix filed three New Drug Applications (NDAs) for different doses of its prostate cancer drug Eligard, and all were approved.

The most recent NDA for another dosage was filed in February. Based on its track record in getting the various Eligard formulations approved, we can expect approval for the most recent filing around December of this year. Eligard is marketed by Sanofi-Synthelabo (NYSE:SNY) and competes against Lupron from Abbott Laboratories (NYSE:ABT).

In addition to its Eligard successes, Atrix has filed 10 Abbreviated New Drug Applications (ANDAs) to market generic dermatology drugs. The ANDAs differ from the NDAs in that they are for marketing a generic version of another company's drug that has lost patent protection; NDA filings are for proprietary products. The FDA has made a decision on five of these ANDA filings and approved every single one of them, with the most recent approval coming this past Monday. The company is still awaiting FDA rulings on the other five ANDAs, and I would venture a guess that most of them will be approved.

Holding a drug stock while awaiting an FDA decision can be nerve-racking, especially when there's nothing you can do to alter the outcome. Chanting incantations or doing a little dance doesn't help. I know because I've tried. In lieu of the arcane arts, perhaps it is best to invest in companies that have a proven track record in getting their drugs approved. Amongst the small caps, Atrix certainly fits that description.

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Fool contributor and Hidden Gems guest analyst Charly Traversowns shares of Atrix Laboratories.