The Stages of Clinical Trial

In my evaluation of the best and worst biotech stocks for 2008, I took into consideration what products a company had in its pipeline and, if they were drug candidates, what phase of clinical trial they were in. A drug discovery company might be involved in only pre-clinical stages of development, depending on contracts, license agreements and collaborative projects with other pharmaceutical companies or CSOs, to bring a product to market. Other companies might focus more on development stages and clinical trials at all or any of the stages outlined below:

Phase I: The purpose is not to test the efficacy of the drug, but more the safety, pharmacokinetics and best mode of administration (oral, injected, etc.). A small number (usually less than 100) of healthy volunteers are given the drug beginning in small doses that are gradually increased.

Phase II: The drug is given to a small number of individuals that suffer from the condition or disease that it is meant to treat. The main purpose is to further evaluate the optimum dosage and confirm the results of Phase I trials.

Phase III: Once a drug is found to be (relatively) safe to use, and has demonstrated efficacy, a larger group of individuals are treated with it, usually thousands of people over several years. The new drug is compared to the current standard treatment for that disease/condition, and additional treatment regimens are tested including different doses and drug combinations.

Overall, the clinical trial phase for a new drug takes many years, and might still result in rejection of the product by authorities, if data aren't conclusive enough or drug safety can't be satisfactorally demonstrated. Companies that have several drugs in various stages of clinical trial are considered more likely to succeed. Among other things, this is what venture investors look for, since these companies don't have "all their eggs in one basket", so to speak.

A fourth phase of clinical trial, Phase IV, begins once the drug makes it to market. Continued vigilence and record-keeping is dependent upon the participation of patients and doctors who report adverse events or symptoms associated with use of the new product. Phase IV provides companies with data on the long-term efficacy and effects of their product.