Early Biotech Milestones: The Clinical Path to Value Creation

A Biotech is born.

You’ve chosen the founding team and identified the therapeutic and disease model. You’ve also secured a preliminary investment round. Now it’s time to beat the odds by progressing through initial milestones towards commercialization. To make it to market, you must navigate the following:

  • Funding Milestones
  • Early Clinical Milestones
  • First-In-Human (IND US-CTA Global)
  • Phases of development (Phase 2 + 3)
  • Commercialization

But before you begin, here’s a startling truth, one you may already know. Statistics show that 90% of clinical drug development fails. Most biotech failures derive not from challenges with the science but from lackluster leadership, poor team collaboration, and an inability to overcome organizational obstacles getting in the way of good science.


Academics, former pharma executives, and ambitious biotech entrepreneurs pursuing commercialization should understand a few key things:

  1. Timelines are truncated. The timelines for today's biotechs are vastly different from the traditional 10-15 years it took to commercialize a drug. In cell and gene therapy specifically, timelines are much more aggressive.
  2. Complexity has increased. According to BioPharms technology roadmap report: “Although the bulk of new product development costs are still associated with clinical studies, there is also pressure on biopharmaceutical process development and manufacturing to increase speed, improve flexibility and reduce the overall cost to supply a drug or therapy – while simultaneously sustaining or raising quality. As a heavily regulated industry, the extensive time and effort required to obtain global product licensure and approval of significant post-approval changes from regulatory authorities, often with disparate regional requirements, only adds to the challenge.”
  3. Team member agility and flexibility must be prioritized. Whether you are coming out of Big Pharma and are more familiar with working in silos or from academia, where data analysis can extend for lengthy periods, there is a never-ending list of competing priorities in a biotech startup. You and your team must prepare to work cross-functionally, efficiently, transparently, and embrace an agile mindset.
  4. Funding and trajectory management are critical. Get ready to embrace the art of counting backward based on your burn rate to establish your funding runway. A biotech will never be “one and done” with raising capital. You must establish a compelling story, i.e., advancement of the science, reduction of the risk, etc., for investors long before you need that next funding round. That means planning early for future funding milestones long before they happen.

What other key factor distinguishes the biotech and pharma companies that make it to the top 10% that make it to commercialization? It’s visionary leadership.

Successful biotech leaders simultaneously focus on ROI and understand the scientific data needed at each phase of development.

By starting with the end in mind, early biotechs can avoid costly pitfalls and ensure they are focusing on the right activities to stretch the funding runway and maximize therapeutic value.

These themes are woven throughout the milestones we will cover in this article.

Funding Milestones

In today’s financial landscape, investment isn’t as accessible as it used to be. Bruce Booth, a Life Science VC, also shared in his piece for Forbes, “According to Pitchbook.com, the number of therapeutic biotech firms getting their first financing remains largely flat for the past 5+ years despite overall venture funding numbers being 2-3x greater.”

While the long game for biotechs has been commercialization and the possibility of a liquidity event by way of an IPO, these events are also on the decline, making the meticulous management of money in and out more critical than ever.

The numbers don’t lie: the falloff in funding that started in Q3 2021, with far fewer IPOs QoQ, continued through 2022 and correlated with the Genetic Medicine sector.

Investors today are more judicious than in the past. Most are unwilling to commit large sums of money to a project until the human data phase.

That said, it’s imperative to know what moves the needle from a funding standpoint and be extremely mindful, particularly regarding the overhead of initial key hires, human capital, and the size of your payroll and team. As we’ve seen in other sectors, specifically technology, layoffs due to over-aggressive hiring are sobering reminders to hire accordingly, invest accordingly, and extend the longevity of capital.

Also, you must understand all the data you need upfront to help you focus on the right milestones at the right time and secure more funding over time, as the example below outlines.


The opportunity for success will come from steadfastly and diligently achieving value-creating milestones highlighting viability, efficacy, and meaningfulness. You will also need to quell investor concerns and attract additional funding for advancement.

Proactively determining the lay of the land now will help you anticipate cash flow and burn rate to the best of your ability. Per Oxford Academic, “One of the biggest challenges in estimating the success rate of clinical trials is access to accurate information on trial characteristics and outcomes. Gathering such data is expensive, time-consuming, and susceptible to error.”

Given all the variability, if you can see that you’re going to run out of money nine months from now, you’ll be able to anticipate what initiatives require additional capital ahead of time.

One of the best ways to stay on top of organizational obstacles is to think through these scenarios and costs versus addressing them in real-time when the pressure is on and the bank account is dwindling. Accurate scenario planning also helps you right-size your development efforts, given your funding level and the timeline needed.

Gather The Data You Need To Move Forward and Obtain Ongoing Investment.

Pre-Clinical Milestones

Early clinical research is the cornerstone for future development and success. This initial set of activities and data gathering support your proposed treatment in eventually becoming the standard of care while providing confidence that you can transition from animal to human trials.

Many biotechs inadvertently create pitfalls when ascertaining and identifying the preclinical to clinical endpoint/outcomes.

In the “Role of animal models in biomedical research: a review,” researchers caution, “The process of selection of an animal model for biomedical research is a very intricate part, as all models are not acceptable due to various limitations. Many factors should be taken into consideration during the selection of an ideal animal model for biomedical trials. The most important criteria are the proper selection of models in terms of resemblance between animal species and humans in terms of physiological and/or pathophysiological aspects. Detailed evaluation during the application of certain drugs/molecules/devices and their capacity to reproduce the disease or pathology at the same level as that of humans. Availability and the size of animal species under consideration. Long life duration of the animal species under study. A Large animal population in a model facilitates the availability of multiple sub-species.”

When determining your target patient group and aligning the patient group to your animal data, start with the following:

  • Specify the total population
  • Since you can’t treat the whole population, uncover the subpopulation
  • From the smaller subpopulation, ensure that preclinical plans will be sufficient and correlate from there

In other words, your research must be clear on whether your preclinical findings will adequately inform first-in-human progression. Ignoring this level of detail and synthesis is failing o see how this data set fits into the bigger picture of future phases, specifically Phase III.

Much like the financial milestones, approaching all planning with the end in mind will reap dividends, especially for investor confidence, streamlined R&D initiatives, and minimizing future bottlenecks.

Additional Considerations To Support Your Clinical Milestone Progress

Address the following to gather accurate and adequate data.

  • When it comes to animal models, do not rely on the one that’s most familiar to you. If choosing between three animal model options, select the model with the strongest mirror for the target disease phenotype. The wrong choice can drastically alter findings. Here’s an example. You choose to select the animal model that you’re comfortable with yet it recapitulates the disease at 90% versus the less familiar but most similar animal model that then recapitulates the disease closer to 98%. These variances have implications on data integrity and ethics regarding the respect of animal livelihood, to name a few.
  • Uncover similar, if not the same, types of measurements, i.e., evaluating scans, labs, changes in outcomes and ensuring there is a human equivalent, and so on. For example, you can measure blood biomarkers of cholesterol in animals and humans.
  • Gain clarity on when disease symptoms manifest: Correlate disease progression within the animal and identify how this differs from in-human progression.

To further guide your assessments at this stage, remember the time to intervention is important. You and your team must address when it’s the most appropriate time to administer treatment. You will also need to know when it’s too early and when it’s too late.

Additional Aspects Of Early Clinical Milestones

It’s imperative to make sure that the tissue or organ you are treating in the animal is in a similar stage of development/maturity, as close as you can, to the development of the human. For example, treating an animal on the day of birth would be the equivalent of treating a human in the womb.

We cannot emphasize this enough: the disease manifestations and timing of the animal model used need to be as close as possible to that of a human.

Notate when the disease symptoms begin in a human versus when the disease state starts in an animal. One of the major pitfalls to progress; if this time is not close enough, the regulator involved may prohibit the start of your in-human trials and cause delays. Furthermore, insurance providers and health systems may request a discount if they don’t believe the product has durability.

One Final Thought on Pre-Clinical Milestones: Ensuring CMC Readiness

Our suggestion, and strong emphasis, is to use the human grade (clinical grade) in animals as early as possible.

Connecting this back to fundraising: while the use of clinical-grade product in your animal trials may be more expensive, it will expedite the process in later stages by circumventing the need to go back and complete additional animal testing with a clinical grade product once more. A wise choice that saves the clinical team both cost and time from duplicating efforts.

First-In-Human (IND US-CTA Global)

Once the early clinical data, testing, and initial regulatory interactions are complete, the next milestone is First-In-Human trials.

“First-in-human (FIH) trials are the link to advance new promising drug candidates and are conducted primarily to determine the safe dose range for further clinical development. Cross-functional collaboration is essential to ensure efficient and successful FIH trials.”

Furthermore, FIH studies are always preceded by submission of regulatory filings to health authorities (e.g., investigational new drug (IND) applications in the United States, Investigational Medicinal Product Dossier in Europe, etc.) in the countries where studies are conducted.”

At its highest meaning, First-In-Human will require you to anchor your assessment from early clinical trials to support your efficacy argument. At this time, you and the team involved need to finalize all preclinical to clinical translatable endpoints as part of your IND/CTA submission.

For example, “We’ve seen this progress in the animal for X; we will see a similar response in the human for Y.” Similar is the keyword here. Rarely are these results 1:1.

Whether you’re submitting in the United States or Europe, “The specific IND/CTA-enabling GLP studies you need are unique to your drug candidate, its therapeutic indication, the study data and also the regulatory agency. The FDA and EMA have different regulatory requirements; therefore, it is vital to understand those differences so you can design and plan your IND/CTA-enabling studies accordingly. Because it’s common to file a drug application in both regions, strategically planning your IND/CTA-enabling GLP studies will help optimize your approach and spend.Source.

Regardless of location, both agencies want you to show the risks vs. benefits of your treatment through a risk-benefit analysis. This reporting specifies that you, and your team, are aware of the risks associated with the treatment. However, you also acknowledge that the benefits far outweigh those mitigating factors.

While there are several other components to First-In-Human trial design, including site selection, dose analysis, site initiation visits, and more, we will conclude that dose extrapolation also needs to be finalized.

In your toxicology study, there must be a comparative amount of dosage, and its equivalent in the animal, to what the amount and its equivalent will be for humans, along with your underlying rationale supporting how you have come to this calculation, be it an empirical approach or otherwise.

To conclude, in “Design and Conduct Considerations for First-in-Human Trials” (Shen J, Swift B, Mamelok R, Pine S, Sinclair J, Attar M), the contributors emphasize, “Toxicological assessment of the drug candidates is not only needed to meet regulatory requirements but also ideally leads to understanding of on-target and off-target pharmacology so translational risk to humans can be minimized.”

At the end of FIH, you will close your study and potentially roll over into long-term follow-up.

Phases of development (Phase II + III)

By the time you get to these stages, you and your team will be excited, for this is no easy feat. Yet, there will still be obstacles and challenges to push through as you grow more confident in your treatment.

Depending on your early clinical approach, you will have a few options during the next development phases.

Before we examine these, for definition's sake, the FDA describes phase I as being 20 to 80 healthy volunteers or people with the disease/condition, phase II as being a trial with up to several hundred people with the disease/condition, and phase III as being 300 to 3,000 volunteers who have the disease or condition.

Additional functions need to come online during these phases, such as Medical Affairs, Commercial, and Pharmacovigilance (PV). Establishing a medical affairs function, organizational structure, and governance is vital to create a bridge between the organization and the medical community.

Why mention this during phases II and III? Medical Affairs is often pushed to the background until it’s absolutely necessary, which is shortly before product launch. Even though it is possible to spin up a medical affairs function on a short timeline, you ideally get ahead of the game and begin establishing the medical affairs function much sooner. The medical story drives the value of your therapeutic, and the Medical Affairs function is a key part of crafting and delivering that story effectively to stakeholders.

With regard to Pharmacovigilance (PV), sponsors need to ensure their Pharmacovigilance (PV) system is built to support the post-market setting as it needs to be compliant with regulatory agencies (local and global regulations). Sponsors may need to build out their PV team to manage the increase in day-to-day PV medical and operational activities to monitor product safety.

Determining The Appropriate Phase For You and Your Team

Some biotechs may have the option of a rolling phase I, II, and III approach, which simply means as you are starting your phase 1, you could go straight to your pivotal study, phase 3, and supply the larger population for the disease you have treated with your commercial-grade product.

The second option is to expand the population base and the criterion from phase I, i.e., testing on a younger or older population, testing at a different severity stage of disease, etc. If pursuing this route, you would run the study in the chosen population. Once you’ve demonstrated initial efficacy, you can move into phase III with the totality of the population. In keeping with the risk/benefit theme from our FIH section: this second option does take more time and is cost-heavy because you aren’t getting commercial revenue if you have a licensed product. However, the benefit is that it does help mitigate the payer risk.

Phase III: Commercial Grade Onward

At phase III, data integrity is as important as ever. While you are only using your commercial-grade product from this point onward, you will still be responsible for recording safety endpoints and other key information. As a plus, given your previous analysis and track record, you will have fewer safety endpoints to monitor and report.

While safety endpoints decrease, phase III is when the number of your treatment efficacy endpoints can increase. You will need to demonstrate how your therapy has improved the patient’s state at this stage.You can communicate changes such as improving patient life span, patient mood, and observations to shifts in the patient's labs, tissue, etc.

Trial strategy is important, as is the applicability of the patient population, the stage of disease, and the age. End-users bring differing needs and perspectives. Some words to the wise, according to McLeod C, Norman R, Litton E, Saville BR, Webb S, Snelling TL in their journal, “Choosing primary endpoints for clinical trials of health care interventions”:

“It is a responsibility of those who design and conduct trials to choose endpoints which will influence decision-making by clinicians and policymakers. Endpoint selection is a complex process. End-users bring differing needs and perspectives. Poor selection of endpoints makes interpretation and implementation of findings difficult or impossible, limits evidence synthesis, and thereby diminishes the value of the research, resulting in wasted use of resources.”

The main purpose of these endpoints is to show the difference between your drug and therapy versus that of the current standard of care or natural history data. Remember this as you begin your natural history and comparator data early on.

Final Aspects of Phase 3

The time for geographic expansion has arrived. If you focused on one country for your initial studies, you would now expand to others. Your treatment’s impact will reach a new scale from Europe to the United States to Canada.

It is also time to prepare for your BLA/MAA applications and plan for regulatory approval. If you aren’t familiar, BLA stands for Biologics License Application and is processed by the FDA, Food and Drug Administration, whose jurisdiction is the United States, while MAA is short for Marketing Authorisation Application, processed by the EMA, European Medicines Agency, overseeing Europe.

By definition, “The BLA / NDA is the formal process by which a sponsor applies to FDA asking for permission to approve a new biologic or pharmaceutical for sale and marketing in the United States (21 CFR 601.2). The application tells the product's full story of development and supports its use for a specific disease condition. The IND application precedes the BLA / NDA application, and the IND is actually part of the BLA / NDA as it is the living document that is kept up to date throughout the clinical evaluation process.”

Similar to the BLA, the MAA is submitted via dossier and includes data proving that the drug therapy has quality, efficacy, and safety parameters and is suitable for its intended use. The MAA may also include product samples for final analysis.

Commercialization

While this section may appear the lightest of all, rest assured, it is due to the hard work and prioritized clinical focus throughout each supporting stage.

As you think about this stage from the seat you’re in today, we urge you to adhere to the ongoing theme of planning with the end in mind. Many commercialization aspects should be thought of early. With that said, we’ll touch on other key members of your team and advisory, plus the activities they need to be driving to help you get to this milestone.

At this point, the Clinical team becomes much more consultative and is on deck to create summaries of the clinical data, which are then provided to the payor. Additional support will include the finalization of HTA’s, Health Technology Assessments.

With regard to Medical Affairs, to ensure success at this stage, be sure to empower your team early on with a clear plan on the route of administration, distribution, aspect, and storage, as well as how and when you will address advocacy. Speaking of advocacy, consistency is key. Right level your activities. Don’t engage too much too soon. Starting and not following up is worse than not engaging with advocacy groups at all. That said, you can’t afford to wait until this final stage to align with advocacy, either. Be planful.

Another key component of Medical Affairs is that of your Principal Investigator (PI). Identifying your PI is essential as they will be on stage presenting the data. A strong PI embodies the following: someone who is comfortable with public speaking and can engage a live audience.

As a final Medical Affairs action item, we suggest you formulate a steering committee. This will ensure a well-rounded Medical Affairs approach specific to what endpoints should be there. The steering committee will offer a variety of thoughts and observations by providing engagement with more clinicians than just those who are running the trial.

Next comes the role of Pharmacovigilance (PV). Once your therapeutic becomes commercialized, adverse events may be reported by both healthcare professionals and patients. These may be identified via cross-functional departments such as Medical Information, Medical Affairs, Sales and Marketing, and also through other sources such as social media and literature.

Robust PV processes will need to be mapped and put in place to ensure nothing gets missed. There is appropriate processing, assessment, monitoring, and reporting of events through these channels to ensure patient safety and the sponsor complies with regulatory reporting requirements.

Prior to launch, you should assess that you have the right PV partners in place to support your organization and be inspection ready at all times in the event of a planned or unplanned regulatory inspection.

As you envision this milestone and all that it takes to get here, we must impart this final takeaway. Envision payer discussions way before they take place so that, like the various stages we have reviewed, once you get to this point, you will already have the data you need ahead of time.

Closing

We created this overview to equip you with strategic thinking and attention to specifics that are costly when overlooked.

Here’s the biggest reinforcing theme we can impart to you. It’s not the logo or the on-air commercials, or any similar go-to-market functions that will make or break your treatment.

The biggest driver of value for all stakeholders: you, your team, investors, the payers, and the patient population at large, come from a clearly defined medical story driven by successful clinical development. Remember that first and foremost. And don’t forget to begin with the end in mind!

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