We know what clinical trial success rates have been like for the last twenty years or so (hint: not so good). Are things turning around, or not? This Nature Reviews Drug Discovery piece takes a look at the 2008-2010 data. It's not necessarily reassuring:
At present, however, Phase II success rates are lower than at any other phase of development. Analysis by the Centre for Medicines Research (CMR) of projects from a group of 16 companies (representing approximately 60% of global R&D spending) in the CMR International Global R&D database reveals that the Phase II success rates for new development projects have fallen from 28% (2006–2007) to 18% (2008–2009), although these success rates do vary between therapeutic areas and between small molecules and biologics.
There were 108 Phase II failures in 2008-2010, and for 87 of those we have a stated reason. Half of those were good old lack of efficacy, another 19% failed on safety grounds, and the rest failed for "strategic reasons". The best guess there is that the compounds seem to have been targeting areas where there was already competition, and they didn't differentiate themselves enough from the standard of care to be worth continuing. That's worth thinking about in the context of the arguments about "me-too" drugs. To hear some of the industry's critics tell it, there shouldn't be any such failures at all, since they seem to believe that even most marketed drugs really don't differentiate themselves from their competition as it is.
Nearly 70% of those 108 failures, by the way, were in four therapeutic areas: cardiovascular, CNS, metabolics, and oncology. (What we don't have are the failures adjusted for how many drugs were taken into the clinic in the first place in those areas). CNS and oncology are traditional high-risk areas, of course, and I think that a lot of the metabolics failures were in diabetes. That's a tough field - big market, but pretty well-served, making efficacy versus the standard of care a high bar to clear, and this while the FDA's safety requirements have gotten very stiff indeed.
But cardiovascular - that's interesting, since that area has traditionally had one of the better trial success rates. Perhaps that one is also suffering from the standard of care being pretty good (and often generic, or soon to be). So the high-success-rate mechanisms of the old days are well covered, leaving you to try your luck in the riskier ideas, while still trying to beat some pretty good (and pretty cheap) drugs. . .
Update: it's been suggested that some of these "strategic" failures are a sign of what happens during merger/acquisition activity. Could be, but you'd have to run these down company-by-company. I'll see if I can contact the authors of this paper about that idea. . .