With medical and scientific advances progressing at an exponential pace, FDA appears to be taking a more aggressive stance in imposing clinical holds on studies where adverse events are reported. Over the last several years, FDA has increased its imposition of clinical holds by about 20%, potentially due to FDA taking an overly cautious approach to new technological advances. These holds, whether related to toxicity, chemistry-manufacturing-and-controls (CMCs), or something else often takes months to resolve. While done in the interest of patient safety, ordering clinical holds too quickly can have significant and untoward impact on study sponsors, particularly for small and mid-sized biotech companies. 

Small and mid-cap biotech companies provide outsized contributions to new drug development, particularly related to oncology products and gene therapies. In the area of oncology, for example, 100% of approvals for small biotech concerned novel therapies, as opposed to indication expansion, which dramatically increases the stakes in securing favorable clinical trial outcomes. While many clinical trials are re-started after resolution of the clinical hold, the holds themselves come at great cost. Stock price can drop significantly for small to mid-cap companies. And companies face the risk of shareholder litigation related to delayed disclosure of clinical holds or details about the clinical holds.

So what actions can small and mid-sized biotech companies take on the front end to best insulate themselves from the blow of a clinical hold? Most importantly, companies should drive the narrative with internal and external stakeholders early and often: FDA continues to take more aggressive postures with clinical holds across the industry as they are a part of doing business in a tightened regulatory environment. If and when the FDA imposes a clinical hold, information about the hold should be disclosed to stakeholders, along with the steps necessary to expeditiously resolve the hold. By setting expectations from the outset, companies can reduce the downside risk and soften the blow of clinical holds.