Well-conducted Phase II clinical trials provide the data required to determine whether there is a case to be made, both scientifically and commercially, for progressing a drug candidate into Phase III trials. At present, however, Phase II success rates are lower than at any other phase of development. Analysis by the Centre for Medicines Research (CMR) of projects from a group of 16 companies (representing approximately 60% of global R&D spending) in the CMR International Global R&D database reveals that the Phase II success rates for new development projects have fallen from 28%(2006-2007) to 18%(2008-2009), although these success rates do vary between therapeutic areas and between small molecules and biologics. As the current likelihood of a drug successfully progressing through Phase III to launch is 50%(Nature Rev. Drug Discov. 10, 87; 2011), the overall attrition of late-stage drug development seems to be unsustainably high.

To help understand these trends, Thomson Reuters Life Science Consulting analysed the 108 reported Phase II failures from 2008 to 2010 for new drugs and major new indications of existing drugs (Drug News Perspect. 22, 39-51; 2009; Drug News Perspect. 23, 48-63; 2010; Drugs Today, 47, 27-51; 2011). Out of these, 87 reported the reasons for failure (FIG. 1a): 51%(44 out of 87) were due to insufficient efficacy, 29%(25 out of 87) were due to strategic reasons and 19%(17 out of 87) were due to clinical or preclinical safety reasons. Out of the 25 failures that were terminated for strategic reasons, 16 involved validated targets such as peroxisome proliferator activated receptor-[gamma](PPAR [gamma]) and factor Xa, therefore suggesting that some of these failures were due to inadequate differentiation from more advanced drugs in the same class or from drugs with similar indications in another mechanistic class. Out of the 21 failures for which reasons were not reported, 17 involved validated targets, although not always in an approved indication for drugs affecting that target. Again, it would seem reasonable to conclude that some of these failures were due to insufficient evidence of an efficacy advantage over a more advanced drug; however, it is important not to rule out that failure could be due to the change in the benefit-risk balance of a known target in a new patient population. These data also show that 68%(73 out of 108) of failures fell into four therapeutic areas (FIG. 1b): alimentary/metabolism, cancer, cardiovascular, and neuroscience. Notably, 61%(14 out of 23) of failures in alimentary/metabolism are for diabetes.