Here is a brief description of the various phases of clinical trials:
Phase 1: is a small trial of healthy volunteers. The drug is studied to understand how it works in the human body.
Cancer drugs are an exception. They are not given to healthy volunteers because they are typically considered as too toxic. Instead, they are given to cancer patients.
Phase 2: is a midsized trial with a bigger amount of patients. Safety and efficacy are analysed.
Data from Phase 2 trials is usually the first real indication that a drug may be safe and effective. There’s a lot more work to be done before it crosses the finish line and gets to market. Phase 2 is the first time you can realistically begin to think the company may have something worthwhile. But still, approximately 50% of all drugs with a successful Phase 2 trial fail in Phase 3.
Phase 3: is a large trial where an optimal dose is studied for safety and efficacy. The data from this trial is what is submitted to regulatory agencies for approval.
If you are looking for ideas to invest in the biotech sector, look for upcoming Phase 2 trial data releases as a good place to start your research. You may find a powerful catalyst in the near future.
Sven Franssen