Strategic Phase II Planning — More Important Than Ever for the Biotech Industry Lukas Makris, Ph.D. CEO Phase II programs should not only be judged on how well the objectives were met, but on how well they might predict the Phase III outcome. The biotechnology industry has become fertile ground for big pharmaceutical companies looking to capitalize on pipeline products in development, particularly compounds that are in Phase III development. As such, to strengthen their position, there is a need for biotech companies to improve their strategic planning and design of studies in Phase II to minimize the financial risk of clinical development and to ensure product candidates meet their main objectives later in the process. Too often, Phase III trials fail to meet their objectives, despite their Phase II counterparts demonstrating significant promise and likelihood for success. Is it plain statistical chance or are companies cutting too many corners in this middle stage of development? Companies, particularly those with limited resources, naturally model programs from those that succeeded, but have there been enough studies on those programs that failed? Much of the analysis isn’t fundamentally different: Is it really a false negative Phase III or a false positive Phase II? Working with Regulators and Thought Leaders It is critical that biotech executives engage in communications with the FDA early on, but it should not be overlooked that the FDA draws the majority of its conclusions and experience from drugs already tested, reviewed, and approved. This is particularly challenging for the biotech arena because many of these companies are developing breakthrough products and new classes of drugs and there is not sufficient groundwork for comparison. Everyone involved in the process needs to develop knowledge and understanding of the product above and beyond what the pre-existing guidelines call for. Companies need to tap into thought leaders who embrace a particular development project with the enthusiasm needed to support a new research platform. Equally important is formulating a plan to address the questions from the “nay sayers.” Realistic Expectations Biotech companies need to know as much as possible about the product from an advantage and limitation perspective so as to build interest from potential license partners and the financial community. It is not uncommon for Phase II studies to be designed as a “boutique” collection of data rather than a simulation of the broader experience. In many cases, the preset Phase II targets are much easier to meet than the ones in Phase III. That leaves a considerable degree of risk for the third stage of development and creates a false sense of timeliness and economy. There is no doubt that a Phase II study tries to optimize the design by maximizing the “signal-to-noise” ratio, whether the signal reflects the efficacy or safety attributes of the product. But in the process, not just the “noise” but part of the “signal” may be eliminated as well. The key elements of a Phase II study rely on a select set of investigators; a refined patient population based on exhaustive inclusion and exclusion criteria; an optimized assessment of efficacy through endpoints with precise measurements; strict dosing guidelines and an intensive follow-up for toxicity; and possible patient selection bias considering the limited prior exposure of the product. But in Phase III trials many of these criteria are relaxed, while the assumptions for success are not adjusted accordingly. Instead, Phase II results are compared with the known Phase III results of a competitive control agent, and the advantage appears bigger than what it truly is. In addition, failure to adjust assumptions of the Phase III drug often leads to under-powered Phase III programs, with all those associated risks. Even if a significant p-value is demonstrated, it is not the only thing that makes a Phase III study successful. Biotech companies also have to prove to the medical community, potential big pharma partners, and the venture capital community that their original assumptions for effectiveness and safety were met. Surrogate Endpoints It is hard enough to draw conclusions with a surrogate endpoint in a Phase III setting; it is almost impossible to deal with a surrogate of a surrogate that sometimes is used in a Phase II setting. Powering the Phase II studies around surrogate endpoints is not sufficient. A great deal of understanding is needed on how precise the estimates will be for the same endpoints that will be used in the Phase III setting, a critical understanding for the pipelines of many biotech companies. The industry is embracing the term “accelerated” in all milestones associated with success factors: time for first patient in Phase III; time to database lock; accelerated approval, and so on. Equally critical is that companies not overlook the strategies that accelerate evidence of futility. Clinical trials BioCor, Yardley, Pa., is a benchmark clinical research organization that specializes in clinical-data services and consulting to support Phase I through Phase IV programs from clinical plan design to defense of global regulatory submissions, serving pharmaceutical, biotechnology, medical-device, and venture-capital companies worldwide. For more information, visit biocor.com. May 2005 VIEW on Biotechnology

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