Pharmacodynamics is the study of the interaction of drugs with their receptors. At this point, a medicinal chemist will try to improve the way in which a lead compound moves through the body (the process is known as pharmacokinetics). The first step is to identify the pharmacophore. The pharmaco-phore is the part of the molecule that binds with the receptor and is responsible for triggering the therapeutic effect. Lead modification involves altering the molecule to permit an optimal binding of the pharmacophore to the receptor in order to elicit the target effect. In order to achieve this effect, the chemist usually tries to alter the functional groups until he achieves the desired effect.
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