The most commonly cited study of success rates across trials lists Phase 3 probability of success, in aggregate, at 70% [0] Phase 2 success rate is 34%. Phase

The most commonly cited study of success rates across trials lists Phase 3 probability of success, in aggregate, at 70% [0] Phase 2 success rate is 34%. Phase 3 studies are more expensive than Phase 2, but the higher failure rate in Phase 2 makes Phase 2 failure the largest driver of the cost of drug development. Because predicting Phase 2 success from earlier stage data is a daunting task, the industry has started tackling this issue by "failing faster / cheaper", getting to Phase 2 data quickly and cheaply, to reduce the cost of Phase 2 failure. However, companies don't want to fail -- so they sometimes design Phase 1/2 proof of concept studies to increase chance of success rather than increase truth finding. This may end up causing the Phase 3 failure rate to increase, though there isnt yet data to prove this. The IDO-PD1 failure from Merck / Incyte could be interpreted as an example of this phenomenon I wrote a blog post that in part discusses ways companies are trying to reduce cost of Phase 2 failure: https://newbio.tech/blog/bio_startup_ideas.html https://newbio.tech/blog/bio_startup_ideas.html [0] https://www.ncbi.nlm.nih.gov/pubmed/20168317 https://www.ncbi.nlm.nih.gov/pubmed/20168317