Leaving Money on the Table

Biotech Can Increase Valuation by Implementing Adaptive Design

Many biotechs may be leaving money on the table. High-risk clinical evidence collection strategies can significantly devalue a development asset.

Consider the issue of dose selection. The typical clinical trial only tests two or three plausible doses over a narrow dose range in Phase II before selecting a dose for Phase III,1 presenting the risk that the doses included may not reveal the true shape of the dose response curve. Even though Phase III failures are at nearly fifty percent, this practice remains common. If investors were not previously looking deeper into dose-finding designs, they are now. Companies with optimized Phase II dose selection strategies will increase asset value.

Adaptive clinical trials are a powerful approach underused by biotechs to de-risk the development process and increase valuation. Adaptive design can shorten trial duration, reduce costs, prevent incorrect assumptions from derailing a trial, better demonstrate efficacy, and most importantly improve development decision-making. Demonstrated use of adaptive design means that trial conclusions are grounded in solid statistics and a robust body of data.

Adaptive design creates tangible benefits throughout the development process. In exploratory phases, adaptive design can help developers combine design phases and improve resource allocation. In confirmatory trials, it can enable early stopping and prompt changes in allocation rates and reassessments of sample size.


The Basics

An adaptive design assesses initial trial assumptions at defined points during the trial, instead of only at the end, without compromising the validity or integrity of the trial. Errant assumptions, which are not uncommon, are corrected through the implementation of mid-study adaptions, preplanned at the outset of the trial.

There are two classifications of adaptive designs: simple and sophisticated. Simple designs are more well-known and relatively straightforward to implement. The Tufts CSDD estimated that simple adaptive designs can save hundreds of millions of dollars annually if applied across a development portfolio.2 Included in this class are designs that enable early termination for success or futility, allowing accelerated development or reallocation of funds to more promising products in the portfolio. Sample size re-estimation designs allow re-evaluation of sample size requirements, and can save a trial that would have missed its primary endpoint due to an underpowered fixed-design approach.

Much greater financial rewards are estimated for sophisticated adaptive trial designs. This class includes: adaptive dose-finding designs, which test more doses and a wider dose range to arrive at a more accurate dose to move into Phase III; population enrichment designs, which use biomarkers to select only those patients most likely to exhibit a promising treatment response; and seamless designs, which combine trial phases to speed up development and reduce costs.

Sophisticated designs, particularly in exploratory development, can increase the odds for success and accelerate development timelines. When deployed across a development portfolio they ensure that the clinical utility and maximum market value of promising compounds are fully understood.

Prevalence and Promise

The biotech industry’s desire to adopt adaptive designs is high. More than 60% of executives were likely or very likely to undertake adaptive clinical trial programs, according to an EY survey.3 Yet, there is a disconnect between desire and practice, as those same survey data showed that only 10% of respondents have actually implemented adaptive designs.3 By contrast, several pharmas have already converted or have committed to converting the majority of their pipeline to adaptive designs. An example of a recent successful adaptive design program for a biotech company is Puma Biotechnology’s neratinib, one of the ISPY-2 breast cancer trial’s first compounds to graduate to Phase III in December 2013. In July 2014, neratinib met its primary clinical endpoint, showing a 33% improvement over placebo in disease-free survival, and Puma plans to file for FDA approval in 2015.4

Companies that want to make similar headlines should be evaluating every therapeutic candidate for the potential to use adaptive design. Similarly, investors should demand this evaluation before writing the first check.

Regulatory bodies support the use of adaptive designs. The FDA announced in 2013 that IND applications utilizing adaptive design could receive Priority Review status and named adaptive design as a strategy to modernize clinical trials and reduce the cost and length of drug development.5 The EMA welcomes studies utilizing adaptive design, recognizing that they have the potential to speed up drug development or “can be used to reallocate resources more efficiently without lowering scientific or regulatory standards.”6

Simply put, adaptive designs offer mid-study course-correction that fixed trials cannot. Because of this, they produce better insights that inform and improve decision-making. In the eyes of an investor, an adaptive design makes a product asset or portfolio of assets significantly more attractive because the development process has been de-risked. Furthermore, the higher quality clinical evidence collected in an adaptive trial creates a more solid argument for payer reimbursement—an issue becoming more prevalent in the midst of healthcare reform.


Phil Birch, D.Phil. ([email protected]), is VP, innovation strategy, alliance partnerships at ICON. For more information on adaptive design and other innovative approaches to conducting clinical trials, visit www.iconplc.com.


1. Grieve, A. P., Looking for Answers. Int. Clin. Trials 2011, 16–20.
2. The Adoption and Impact of Adaptive Trial Designs; Tufts Center for the Study of Drug Development (CSDD): 2013.
3. Biotechnology Industry Report 2014: Beyond Borders – Unlocking Value; EY: 2014.
4. Carroll, J., Puma shares triple on positive PhIII neratinib data, plans to file for approval. Fierce Biotech 2014.
5. 21st-Century Cures: Modernizing Clinical Trials and Incorporating the Patient Perspective. http://www.fda.gov/NewsEvents/Testimony/ucm404647.htm.
6. Reflection Paper on Methodological Issues in Confirmatory Clinical Trials Planned with an Adaptive Design. European Medicines Agency (EMA): 2007.