Clinical development rates are falling - but it’s not all bad news

Over the past decade, a shift has been occurring in biopharma R&D. Despite great advancements in drug technologies and our understanding of diseases, it is getting harder to develop new drugs and successfully bring them to market.

In 2014, the clinical development success rate stood at 10.4%; just over one in every 10 drugs that entered a Phase I clinical trial would get approval and reach patients. Today, analysis from Citeline’s Biomedtracker shows the likelihood of approval is at a mere 6.7%.

It would be easy to draw quick conclusions from this decline. Clinical development success rates are, after all, a crucial industry metric. They are used to support investment decisions in the industry, to quantify risk and to analyse the overall probability that a new complex R&D process will yield successes, both for the company and for patients. But this decline also points to broader trajectories in the biopharma R&D landscape. Awareness of the bigger picture around clinical development success rates paints a somewhat rosier picture and can also inform better, and ultimately more patient-focused, decision making for pharmaceutical companies.

A decade of change

First, let’s look at how things have changed over the past decade and why this might be.

In a landmark Nature article from 2014, Citeline and collaborators at the Biotechnology Innovation Organization (BIO) calculated the widely cited figure of 10.4% for the likelihood of a new Phase I drug reaching the market. Since then, subsequent updates in 2016 and 2021 have showed that industry success rates have moderated, falling first to 9.6%, then to 7.9%. As of 2024, this now stands at just 6.7% - a clear and potentially concerning trend for biopharma R&D.

But look a bit deeper and we can see the different forces at play.

First, success rates vary widely depending on the therapy area. Since each indication has distinct disease mechanisms and validated clinical measures, along with being subject to its own trial designs, competitor forces, and regulatory hurdles, disease-specific benchmarks must be considered. This plays out in a fourfold spread from the disease area with the highest success rates (haematology: 19.1%) down to the lowest (respiratory: 4.5%).

Next, we must consider where a significant amount of energy and investment in biopharma R&D is focussed when looking at development metrics. It is a well-established trend that drug developers are increasingly targeting oncology. With just a 4.7% likelihood of approval for new drugs in Phase I, the overall weighting of oncology within the broader industry is certainly dragging down trends.

Competition also results in greater attrition levels, in oncology and elsewhere. The considerable amount of fast-follower R&D programmes means that only the most differentiated assets have any reasonable commercial prospects once on the market. And the lack of potential on the market is one of the main reasons we see drug candidates dropping out of clinical development.

Responding to the new R&D landscape

So, what does this all mean and is the falling clinical success rate something we should be concerned about?

First, it is a natural consequence of success that these rates might decline over time - drug developers will have picked the low-hanging fruit first, leaving more complex drug targets to work with.

However, this does not mean biopharma R&D will grind to a halt over time or that the downward trajectory is set in stone. The challenge is to innovate and discover in new and successful ways. We are already seeing this across several areas, with greater use of precision therapeutics and biomarkers. We are also seeing greater regulatory innovation, and use of AI to run and manage clinical trials in a more cost-effective manner. Greater R&D efficiency can change the equation when it comes to the viability of unproven drug targets entering the clinical research stage.

Falling clinical development success rates do not point to an industry that has run out of ideas and they certainly should not be thought to inspire more conservative R&D decision making. If anything, this trend points to an industry that has more appetite and room in the system to make riskier bets on drug candidates or try new treatment options for diseases.

The potential payoffs for this sort of R&D can be immense, for patients and for companies. Just take obesity, Alzheimer’s disease, and metabolic dysfunction-associated steatohepatitis (MASH) — three areas with historically low success rates, but now with an array of potential treatments with massive commercial potential.

Of course, drug developers must still be cognisant of the success rates and consider risks in their decisions. This is why metrics like the clinical development success rate are so fundamental for building a robust R&D strategy. The bottom line is that companies need the best possible understanding of asset potential and an appreciation that early-stage discontinuation is all part of the game when looking to produce better treatments for patients.