Biomedical Engineering Reference
In-Depth Information
Registration
1%
Pre-registration
1%
Launch
8%
Phase III
6%
Preclinical
Phase I
Phase II
Phase III
Pre-registration
Registration
Launch
Phase II
19%
Preclinical
50%
Phase I
15%
Fig. 3.1
Breakdown of drug compounds by stage of development (PharmaProjects
2010
)
16 therapeutic areas/classes/groups (with differing numbers of projects in each
area) as shown in Table
3.1
.
About 50 % of drug compounds are in the preclinical phase, while the remainder
is spread across the more advanced stages of development, as shown in Fig.
3.1
.
The uncertainty of success rates by phase can be quantified using historical data.
Blau et al. (
2004
) suggest that roughly 20 % of projects drop out after Phase I, and
among the remaining projects, 80 % do not pass Phase II testing. There is no guar-
antee of success even in Phase III of large-scale clinical trials due to unexpected
reasons that did not manifest in earlier trials. For example, from a comprehensive
data base across over 200 pharmaceutical companies, Girotra et al. (
2007
) found
132 Phase III failures in the period 1994-2004. According to their data, a median
firm (with annual sales of US$13.26 billion) experienced 6.5 Phase III failures dur-
ing this time period, and one of the largest firms, Pfizer, experienced 19. Thus Phase
III failures are more than infrequent anomalies and are factored into the overall
capitalization of drug development costs.
3.1.3
Pharmaceutical Industry Structure
While our discussion thus far has spotlighted large pharmaceutical firms with a
strong legacy of chemistry-based drug development, the last 2 decades have seen
the advent of small research-oriented biotechnology firms that focus on a narrow
range of compounds. These entrepreneurial ventures often partner with larger firms
who have more access to capital and have expertise in conducting large-scale trials,
under various types of legal structures (profit sharing, acquisitions, joint ventures).
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