If a news story says a drug is “in Phase 2” and you are not sure what that means, clinical trial phases explained simply: each phase asks a different question, moving from safety to effect to comparison to long-term monitoring.
This guide describes the phases as public regulators and research bodies explain them, and it says nothing about any particular drug.
This guide is part of our wider series on what is drug discovery, and it covers the human-testing stage.
| Item | Value |
|---|---|
| Phase labels used in trial registration | Five: Early phase 1, Phase 1, Phase 2, Phase 3, Phase 4 |
| What sets a trial’s phase | The study’s objective, the number of participants, and other characteristics |
| Failures linked to unmanageable toxicity | 30% (2010 to 2017 data) |
| Candidates that fail after entering clinical studies | About nine out of ten |
| Share of clinical failures linked to lack of efficacy | 40%-50% (2010 to 2017 data) |
These figures come from NIH’s NCATS registry guidance and a peer-reviewed analysis on PubMed Central. They can change, so check the sources before you rely on them.
Why clinical trials are split into phases
Testing a new compound in people carries uncertainty, so researchers go step by step, and ethics boards and regulators oversee the process. Each phase answers one main question before the next, larger and costlier step begins.
The NCATS registry guidance says “The phase is based on the study’s objective, the number of participants, and other characteristics.” In other words, the phase is a label for the purpose of a study, not a grade of quality.
The SEER training module from the US National Cancer Institute describes the same logic: “Testing and evaluation is accomplished via sequential steps called phases.” Real programmes can be messier than that simple sequence suggests.
Before any of this begins, a developer collects laboratory and animal data. If you want that earlier context, see our overview of the drug development process stages.
Phase 1: is it safe, and how does the body handle it?
The first human studies focus on safety and dose. The SEER module says a Phase I trial “is generally conducted on healthy individuals and identifies how the drug is metabolized and excreted.”
Phase 1 studies examine how the drug is metabolized and excreted.
Early phase 1
Registries also use a label called Early phase 1, formerly called Phase 0. NCATS lists it as one of five labels, and the SEER module says such trials “help to determine if a new drug should even be evaluated.”
Phase 2: is there a signal of effect?
Phase 2 enrols more people than Phase 1. The SEER module describes it as having “a larger number of persons participating in the trial but less than 100 persons” in its cancer example, though sizes differ between conditions and regulators.
The goal is to look for an early sign of an effect on the condition.
Phase 2 results are often hard to interpret. Small groups can produce encouraging numbers that do not hold up later, which is one reason many candidates stop here.
A Phase 2 decision is also a business and scientific judgement. Sponsors weigh the signal they saw, the safety record so far, and the cost of a much larger study, and they may redesign, pause or stop a programme.
For readers following AI-assisted drug discovery news, this is a useful checkpoint. A Phase 2 result adds to the evidence from people about whether the idea holds up.
Phase 3: how does it compare with current care?
Phase 3 trials are the large, late-stage studies. The SEER module explains that once an effect and the side effects are understood, “the treatment is compared to the current treatment.”
The comparison step is what separates this phase from the earlier ones. It compares a candidate with the current treatment.
Results that looked promising in a smaller Phase 2 group can fade when many more people, with more varied backgrounds, are included.
Results from this phase can feed into a marketing application. How regulators weigh that evidence is covered in our guide to the fda drug approval process.
Phase 4: what happens after a product is on the market?
Phase 4 studies take place after approval. The SEER module says they “look at long term effectiveness and safety of a drug once it has been in use.”
This matters because rare side effects may only appear once a product is in wide use, or when people take it over a long period.
Trials of devices or behavioural interventions often carry the label “Not Applicable”. NCATS says this is used “to describe trials without FDA-defined phases, including trials of devices or behavioral interventions.”
How often do candidates fail across the phases?
Most do. A peer-reviewed analysis on PubMed Central says “nine out of ten drug candidates after they have entered clinical studies would fail during phase I, II, III clinical trials and drug approval.”
The same paper notes that this figure covers only candidates that already reached Phase I. If preclinical candidates were counted, it says the failure rate “is even higher than 90%.”
For 2010 to 2017 trial data, the authors list four reasons for failure:
- Lack of clinical efficacy (40%-50%)
- Unmanageable toxicity (30%)
- Poor drug-like properties (10%-15%)
- Lack of commercial needs and poor strategic planning (10%)
These are estimates from one analysis, and other studies report different percentages by phase and therapeutic area. Computational tools, including AI models, aim to help earlier stages choose better candidates, but whether they change these failure rates is still an open question.
Frequently asked questions
What are the five phase labels?
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NCATS lists Early phase 1, Phase 1, Phase 2, Phase 3 and Phase 4. Each label reflects the study’s objective, size and other characteristics.
Does passing Phase 3 mean a drug is approved?
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No. Phase 3 data support a marketing application, which a regulator then reviews. The outcome depends on the regulator’s judgement of benefits and risks.
What does “Not Applicable” mean as a phase?
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Registries use it for studies without FDA-defined phases, including trials of devices or behavioural interventions, according to NCATS.
Why do so many candidates fail?
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One PubMed Central analysis points mainly to lack of efficacy and unmanageable toxicity. Poor drug-like properties and commercial reasons also play a part.
Can this guide help me choose a trial?
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No. This site is educational and gives no medical advice. If you are considering joining a trial, ask your doctor or another qualified health professional, who can discuss your own situation.
This article is for information only. It is general education about science and the drug industry, and it is not medical, treatment or investment advice.
