Clinical trials are the process by which a new drug's safety and effectiveness are tested as part of the FDA approval process. When a company discovers and develops a new drug, they must first run extensive pre-clinical trials prior to testing the drug candidate on people. This pre-clinical development process serves to determine a drug's safety, the best starting dose for human clinical trials, and the interaction between the body and the drug. Once pharmaceutical companies have enough information about the drug, they can apply for approval to run clinical trials on humans.
Clinical trials can only come after extensive pre-clinical testing and development, which can be costly. Additionally, clinical trials themselves are very expensive to conduct. If a company's drug reaches a late-stage clinical trial and fails, the money spent up until that point will be lost. Any pharmaceutical company involved in the development of new drugs can be significantly impacted by the results of clinical trials, either positively or negatively.
Major pharmaceutical companies include:
As shown in the graph, these companies have anywhere from 20 to 140 new products in various stages of development. In general, Phase II is the most common place for drug candidates to fail. As such, companies with a higher percentage of products that either are in Phase III clinical trials or for which they've already filed a new drug application (NDA) are at somewhat lower risk of failing a clinical trial.
Manufacturers of medical equipment, such as Advanced Medical Optics, are impacted by clinical trials as well.