Clinical Trial Phases

One area I find of interest is biotech stocks. I quickly understood the importance of understanding the clinical trial process before I invested any money in this arena. The purpose of this article is to share the information I have collected relating to the clinical trial process. The source for the information contained in this article can be found at www.investbio.com/clinical_trials_biotech.asp. If you are interested in investing in biotech stocks, I highly recommend that you check out their website.

In the US, before a drug can be sold to a consumer, over the counter or prescription, it must be thoroughly tested. Clinical trials are the most expedient method of testing provided the studies are structured and deployed in accordance with the Food and Drug Administration (FDA) requirements.

The clinical trial process consists of the following stages:

Discovery
2-10 Years

Pre-Clinical
Testing performed on animals or in a test tube to determine if the drug appears safe and effective in animals prior to requesting approval from the FDA to begin testing the drug in humans. To obtain approval, the FDA must approve an Investigational New Drug [IND] application of which only five out of every five thousand are approved.

Phase I Trials
20-30 volunteers
Testing is normally done on volunteers (healthy preferred) to test for safety, dosage and any signs of effectiveness. The FDA approves approximately 70% of the Phase I Clinical Trials and this stage takes about 2-3 Years to complete.

Phase II Trials
100-300 volunteers
Testing in Phase II checks for the efficacy of the experimental drug and to evaluate the common short term side effects and risks. For Phase II to be approved, the experimental drug must show a unique benefit such as dramatic remissions or recoveries or minimal benefits for previously untreated diseases. The FDA approves approximately 50% of the Phase II Clinical Trials and can take up to two years to complete.

Phase III Trials
1,000-3,000 volunteers
This is a critical phase due to the enormous cost and impact on obtaining FDA approval. In this phase the overall benefit-risk relationship of the drug is evaluated. The FDA approves about 70%-90% of the drugs that reach and complete this phase successfully and can take several years to complete.

Phase IV Trials
Post Market Testing and Post Marketing studies that gather additional data relating to the risks, benefits and optimal use of the drug for submission to the FDA.

After Phases I, II and III are successfully completed and all results are submitted to the FDA, the company can obtain a New Drug Application (NDA) which will enable the company to market the drug to the public and normally takes up to 1 year to complete.

Fast Track, Orphan and Subpart E Status
Patient populations less than 200,000
If granted by the FDA, the company can obtain an expedited review and approval for the drug. As a result of the 1983 Orphan Drug Act, the FDA can provide market exclusivity and tax breaks for companies with Orphan drugs.

If you would like additional information, I found the following websites extremely helpful:

ClinicalTrials.gov - provides frequently updated information about federally and privately supported clinical research.

ClinicalTrials.gov– a glossary that contains the most common terms used in clinical trials.

FDA – U.S. Food and Drug Administration - provides and enormous amount of data that is both comprehensive and educational.

I hope you found this article informative and useful. Remember that investing in the stock market can be risky, so it is important to always do your own due diligence prior to investing your money.

LA