Clinical Trial Phases

The sequential stages of testing a drug candidate in humans, typically Phase I, II and III, before regulatory review for approval.

Example

A candidate passing Phase I with 60% probability, Phase II with 35% and Phase III with 60% has about a 12.6% overall chance.

Important

Probabilities multiply across phases, so overall approval rates from early trials are low and vary by disease area.

Related terms

  • Binary Outcome — An outcome that tends toward one of two extremes, such as a large success or near-total loss, with little in between.
  • Technical Risk — The risk that a technology will not work as intended, cannot be produced at scale, or takes much longer to develop than planned.

Lessons that explain it

  • Biotech outcomes are often binary; healthtech outcomes depend on who pays — Biotech value is driven by clinical trials with low overall success rates and long timelines. Healthtech depends on proving clinical or economic value and securing payment from hospitals, insurers or health systems. (13 min)

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