Copyright: <a href=''>atic12 / 123RF Stock Photo</a>Creating a single new prescription drug is currently estimated to cost $2.6 billion dollars. This is a sum so vast that only a small number of companies can afford to even consider the possibility. It is also a figure which is overshadowed by one major factor: failure.

A staggeringly small number of medications are ever successful. As few as 9.6 percent of the total number of drugs considered for clinical trials gain US Food and Drug Administration (FDA) approval. This would mean that for every ten trials, nine result in failure, with the associated costs still looming over the heads of the company funding the trials.

In order for a drug to be approved it must make it from its initial development stages, through phase I, II and III clinical trials. If the drug is deemed successful at each of these stages it can gain approval from the FDA and other regulators around the world, is deemed fit for public consumption and is placed on the market.

To understand the reasons for failure, it is necessary to understand the structure of the drug development.

Pre-clinical development

This stage of development occurs before any human trials begin. Typically involving an in vitro (Latin for within the glass; refers to non-animal based experiments, usually using cellular models such as E.coli) stage of development, this is a useful method of assessing protein interactions and establishing chemical/protein targeting molecules for use in the medication. If this is successful the study can then begin using in vivo (within living organisms such as mice and rats) techniques to study effects of the potential medication on a living organism.

It is in this stage that I have personal experience, working on testing novel treatment methods for Alzheimer’s and Huntington’s diseases in an academic setting. A consistent observation is that at this stage of development it is far more likely for a laboratory to undertake research that differs very little from previously published work than to take on a risky, yet possibly groundbreaking project.

Why favour marginal steps forward? The answer is simple: funding. Laboratories both in academic and industrial settings are often underfunded and will pursue research with near-0 guaranteed results. This translates into numerous published papers, attracting the attention from those who may provide grant money and investment.

According to research from the Biotechnology Innovation Organization (BIO) only 5 in 5000 drugs that make it to preclinical trials ever reach human testing stages. This highlights the vast amount of research that will need to be funded, but results in nothing. Typically research failures at this level will receive no media attention. Less money will have been lost at this stage, but due to the sheer number of failures multiple projects will often be funded by one organization.

Phase I human trials

The intention of phase I trials is to analyse the safety of the medication. This is the first trial level conducted in humans, but limits the number of participants to less than a hundred. Subjects are divided into groups who will receive varying levels of concentration of the drug, with the intention of assessing at what dosage the drug will show toxicity.

Dose escalation will display at what dosages the drug is showing the intended effect, as well as at what levels any side effects appear. In some cases the drug may prove to be highly toxic at a set level. A schedule of treatment will be established in this trial level, as well as the most effective dose.

The trials will typically be conducted by a contract research organization (CRO) on behalf of the pharmaceutical company. At this stage the process becomes riskier. Costs at this point will be higher, with the fees of the CRO as well as the overall costs of the trial adding to potential losses.

This stage has the highest success rate of the human clinical trials, with estimates of 63.2 percent of trials moving to the next level. This is due to the efficacy levels not being the key concern; only the safety of the medication. A drug may is only likely to fail at this stage if there are pressing health concerns related to its consumption.

Many failures are simply never reported on, as the company may choose to keep the results of the trial out of the public domain. A notable example of one phase I failure in 2016 is that of Ziopharm Oncology’s combination of gene therapy candidate Ad-RTS-hIL-12 plus oral veledimex intended to treat a form of brain cancer.

During the trial three patients died, one of them from intracranial haemorrhage. This resulted in the withdrawal of the trial as well as a 26 percent fall in the company’s share price. Media attention was gained due to the associated deaths.

Phase II human trials

With the safety of the drug assessed to a degree, and a dose and schedule of treatment established, the second stage intends to monitor how much of an impact the drug has. The biological activity of the drug will be monitored to see if it shows any effect,. There will also be continued refinement to the dose to assess the maximum beneficial effect with the lowest degree of side effects.

Success rate at this stage falls to 30.7 percent. This comes down to a number of factors. Phase III trials are considerably more expensive; this makes phase II the make or break point. A company must decide at this point whether the drug is likely to be financially viable following approval, leading to many medications being cut at this stage. It may also be found that the drug is not as effective at treating symptoms as thought in the pre-clinical trials, or that an effective dose comes with enough side effects to make the medication unviable.

Notable examples of failures during phase II trials come from non-steroidal anti-inflammatory drugs (NSAIDs), particularly in treating Alzheimer’s disease. Many NSAIDs typically show no benefits. It is often found that, even amongst the successful NSAIDs that move on to phase III trials, the benefits are marginal and come with a host of side effects, for example in the case of R-Flurbiprofen.

Juno therapeutics has seen a number of leukaemia medications halted at phase II. Two were halted in 2016 following the deaths of a number of the patients within the study. These drug failures saw notable hits to the company’s share prices. This presents another concern over drug trial failures, with yet another way to damage the profits of the company.

Phase III human trials

Copyright: <a href=''>annete / 123RF Stock Photo</a>Phase III trials are intended to assess the clinical efficacy of a medication, and so its potential value in a clinical setting. These trials are the largest in scale, with the price reflected accordingly.

The success rate at this stage is estimated at 58.1 percent, though at this point – due to the study likely gaining media attention – any failures are often well publicised. To fail at this stage will incur a large financial loss, with the potential for years of research to be lost. Media buzzwords do not help in this situation; referring to a treatment as “groundbreaking” or “miraculous” before the trial is shown to be successful is often setting a trial up for a more widely publicised failure that can result in a huge loss for the company involved.

Large pharmaceutical companies have a lot of treatments in their pipeline removed at this stage every year. Novartis’ heart failure drug serelaxin has recently been halted in phase III. Had the medicine been successful, revenues were expected to exceed $2 billion a year.

A large number of Alzheimer’s medications have met the same fate. Mentioned in a previous article on Hyderus a number of high profile medications focusing on the amyloid hypothesis of disease progression were halted at phase III due to the negligible results. Companies such as Eli Lilly and Merck &Co Inc have had progress on these medications halted. With the hypothesis backing their research left in question, it is highly likely a number of other similar drugs will fail at this stage.

Stage III trials focus on whether the medication will show an effect, often in comparison to the current “gold standard” treatment. If it is less effective, the medication is redundant, and will be dismissed. If there are no current medications, it is assessed whether the medication is cost effective. If it is an expensive medication or has many side effects, but only marginal benefits, it is again unlikely to be approved.

Post trial period

Considering the huge costs associated with putting new drugs on the market, it would be assumed that once a new medication hits the market, it will show the positive returns necessary to make the development process with the costs. This is often not the case.

According to research, 88 percent of biotech companies are not profitable. This is due to only 1 in 5 medications ever making back enough money to cover the initial financial input. Even of the success stories, this means that only a small minority will ever be profitable. Often it is the case that when any profits are made, they are reinvested within the company to future research and development of the next medication.