Before a drug is approved by the Food and Drug Administration (FDA), it must progress through three stages of clinical trial studies to prove the drug’s safety and effectiveness.
Phase One: The drug is tested on humans for effectiveness and to ensure there are no serious side effects. During Phase One testing, the drug is also tested on other ailments, and in other dosages. If side effects are limited, the testing moves on the next phase.
Phase Two: During Phase Two, the drug being researched is tested on one specific disease in a larger group of patients than used in phase one testing. Pre-determined doses are used, with the focus on how well the drug treats and how well it’s tolerated by the patients.
Phase Three: Phase Three is where “blind tests” are often preformed. This is where the patient isn’t informed which treatment they’re given. During this process, the drug being tested is compared with the existing drug(s). The new drug is again studied for it’s effectiveness, how well it’s tolerated, and it’s safety. The question in mind is, how, if at all, is it better than existing drugs? If the drug makes it to the end of this phase, results are submitted to the FDA for evaluation and approval. This phase can take years, because it involves many patients and results can often be subtle, or working in favor of some, but not all patients.
When a drug enters Phase One clinical trials, analysts figure it has a 10%-20% chance of becoming marketable. As each phase is successfully completed, analysts may increase their estimation of the new treatment’s marketability. Investors are interested in bidding on the odds of hope—cancer research, specifically biotechnology. According to Kiplinger’s Personal Finance Magazine, 12/2012 biotech’s disappointing history for stockholders is a thing of the past. With new cancer-drug development being tested, biotech could be the win we’re all waiting for. If you’re interested in company specifics, there are seven biotechnology companies and their progress is in the 12/2012 issue of Kiplinger’s Personal Report. Your library may have a copy.