Big Jump in Early Phase Trials
Registrations of early phase clinical trials took a big jump in 2014, a clear sign that the flood of new money flowing into the bio/pharmaceutical industry is quickly being put to work.
Registrations of Phase 1 clinical trials in clinical trials.gov jumped 42% in 2014 following two years of decline, and reached the highest level since registration became standard. Phase 2 trial registrations increased by 17%, but remain 20% below levels achieved in 2008 and 2009.
The big increase in early stage clinical trial activity reflects what has been happening in the financing of drug development. Venture capital funding, which tends to go to early stage companies with preclinical and early clinical candidates, was up 12% in 2013 and 28% in 2014. Further, partnering activity (licensing, candidate acquisition and co-development) in the last year has focused on early stage candidates as most of the attractive late stage candidates have already been tied up.
In fact, venture capital activity looks to be a pretty good indicator of future early phase trial activity: Phase 1 trial registrations typically rise in the year following an increase in venture capital investments, and fall in the year following a decline in VC activity (Figure 2).
The clinical trials data is also consistent with insights coming from providers of preclinical toxicology testing services, who report substantially increased utilization of their services and facilities after five years of weak demand.
The analysis suggests that providers of services needed to support early phase trials should be highly responsive to announcements of new funding for early stage companies. This includes providers of API process development and manufacture, preclinical toxicology, drug product formulation and manufacture, and clinical supplies services. The PharmSource Lead Sheet reports on an average of 6 new venture capital deals and 15 other financing deals every week, indicating there are a lot of new opportunities for service providers to be pursuing.
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