What Is Phase 1?
Phase 1 is the initial introduction of an experimental drug or therapy to humans. This phase is the first step in the clinical research process involved in testing new or experimental drugs. The Center for Drug Evaluation and Research (CDER), a division of the U.S. Food and Drug Administration (FDA), oversees these clinical trials.
- Phase 1 trial is the first phase of clinical trials overseen by the CDER and is meant to test the safety of a new drug by establishing its side effects.
- Approximately 70% of drugs submitted for phase 1 trials make it to phase 2.
- The results of phase 1 trials on a company's stock price are muted as the probability of success is built into the valuation.
- The clinical trial process begins after the research and development (R&D) of a new drug and consists of four phases.
- Clinical trials are costly, and it is estimated that the phase 1 trial itself can cost between $1.4 million to $6.6 million.
Understanding Phase 1
Phase 1 clinical studies or clinical trials are focused on the safety aspect of a new drug, rather than its efficacy in treating a disease. Phase 1 trials typically involve 20 to 100 people, a combination of healthy volunteers and patients, or people with the condition that the drug is intended to cure or provide therapy for. For example, if the new drug is intended to treat a form of cancer, the research will involve patients with that type of cancer.
The main goal of phase 1 studies is to establish the new drug’s side effects, as well as its metabolic and pharmacologic action. This is achieved by administering increasing doses of the experimental drug to trial participants. Researchers subsequently perform detailed research and analysis on various aspects of the drug, including the body’s response to it, the method of absorption, how it is metabolized and excreted, and safe dosage levels.
In research released in 2016, the Eastern Research Group estimated that phase 1 trials cost anywhere between $1.4 million to $6.6 million. The most important determinant for costs was the therapeutic area of study. For example, the lower bound of the range estimates of the study was for pain and anesthesia, while the upper bound of their range estimates was for immunomodulation.
Phase 1 and the Clinical Trial Process
The phase 1 clinical trial or study is the first phase in the long and grueling process of drug approval. While the primary objective of phase 1 studies is to establish the safety profile of the investigational drug, these studies also enable vital information about the drug’s effects and chemistry to be collated. This information can be used to facilitate the design of well-controlled and scientifically valid phase 2 studies, the next step in the drug development process.
Evidence of early effectiveness in phase 1 trials, while a relative rarity, would be a bonus and can result in significant price appreciation for the stock of the company developing the drug. In most cases, however, the effect of a successful phase 1 trial on stock prices is rather muted. This is because although approximately 70% of phase 1 trials proceed to phase 2, only 10% to 15% of phase 1 drug candidates eventually make it to market.
Phase 1 studies can be stopped by the CDER either at the outset or even after the trials have commenced, for safety reasons or because the sponsor failed to disclose certain risks of the drug candidate to investigators.
During phase 1, researchers try to learn how effective the drug is in specific formats and determine the best dosages. This information is helpful to them in then formulating the trials for phase 2.
Phase 2 in the clinical trial process focuses on how effective the drug is. Phase 3 trials are used to compare the treatment of the new drug to the current established treatment of the medical problem. Phase 4 focuses on testing the effects of the drug on the population after it has been approved by the FDA. All phases of a clinical trial only begin after the extensive research and development (R&D) phase of pharmaceutical companies, which can be lengthy and costly.