Clarity Pharmaceuticals Ltd (ASX: CU6) shares are ending the week on a high.

In early trade, the ASX 200 biotech stock was up as much as 15% to $4.69.

Its shares have since pulled back but remain up 3% to $4.19 at the time of writing.

Why is this ASX 200 biotech stock jumping?

Investors have been bidding the clinical-stage radiopharmaceutical company's shares higher today after it made a big announcement.

According to the release, the U.S. Food and Drug Administration (FDA) has granted Fast Track Designation (FTD) for 64Cu-SAR-bisPSMA.

This is for positron emission tomography (PET) imaging of prostate-specific membrane antigen (PSMA) positive prostate cancer lesions in patients with biochemical recurrence (BCR) of prostate cancer following definitive therapy.

The ASX 200 biotech stock highlights that this milestone builds on its earlier receipt of an FTD for 64Cu-SAR-bisPSMA in patients with suspected metastasis of prostate cancer who are candidates for initial definitive therapy.

FTDs are designed to expedite the development and regulatory review of novel drugs addressing serious conditions with significant unmet medical needs. For 64Cu-SAR-bisPSMA, it provides a number of product development advantages.

This includes paving the way for a faster review process once Clarity submits its product approval applications.

Additionally, it allows more frequent communication with the FDA, providing rapid resolution of queries during development. Overall, this is expected to reduce the review time needed to bring its "innovative prostate cancer imaging agent to market, potentially improving diagnosis and treatment planning for patients sooner."

'Another significant milestone'

The ASX 200 biotech company's executive chair, Dr Alan Taylor, was pleased with the news. He said:

Receiving the second FTD for 64Cu-SAR-bisPSMA and well within the 60-day period following our application submission, reserved by the U.S. FDA for review, is yet another significant milestone in our bisPSMA program.

This highlights the high unmet need for novel diagnostics in prostate cancer and the high quality of data we presented to the FDA.

Dr Taylor also highlights that the company has a significant market opportunity to target if it receives regulatory approval. He adds:

The market for first-generation diagnostic PSMA PET today is approximately US$2 billion (AU$3.2 billion) in the U.S. alone, with little differentiation between products. It is expected to further grow to US$3 billion (AU$4.75 billion) by 2029.

The development pipeline of new products coming to market, outside of 64Cu-SAR-bisPSMA, also offers no differentiation from the existing offering, with some new entrants commercialising the unpatented 68GaPSMA-11 agent, which has been capitalised on by three separate groups already.