Decade Review: Termination Rate Doubles, Why Is It Increasingly Difficult for Clinical Trials to Reach Completion?

The success rates of Phase II and Phase III clinical trials are considered one of the most important drivers of overall efficiency in drug development. On December 18, 2025, Nature Reviews Drug Discovery published a systematic analysis conducted by the Epistemic AI team, focusing on Phase II and Phase III clinical trials that were actively terminated between 2013 and 2023.

The study shows,The number of trials terminated during this decade increased from 209 to 435, with the termination rate climbing from 11% to 23%, more than doubling.More noteworthy is that,Strategic and commercial reasons, rather than efficacy issues, have become the main driving factors for the halt in trial growth.Accounting for 36% of all termination cases. This finding provides an important perspective for understanding the challenges currently faced by the drug development ecosystem and how to reduce avoidable resource waste.

Clinical trials are a key step in the development of new drugs and are typically divided into Phase I (safety evaluation), Phase II (preliminary efficacy evaluation), and Phase III (large-scale efficacy confirmation). The Phase II trial aims to explore the drug's efficacy and optimal dosage in a specific patient population, usually involving dozens to hundreds of subjects; the Phase III trial is conducted on a larger scale (hundreds to thousands of patients) to verify the drug’s efficacy and safety, serving as a critical step before regulatory approval. The success rates of these two phases directly determine whether the drug can ultimately reach the market and represent the most resource-intensive stages of R&D investment.

However, not all clinical trials that fail to bring new drugs to market end in the same way. Some trials complete the entire process as planned but "fail" due to not meeting pre-set efficacy endpoints or encountering safety issues; others are actively terminated midway by the sponsor and discontinued.This study focuses on the latter — those trials that were actively terminated.This choice reflects considerations of data availability and definition clarity: compared to the specific reasons for failure after trial completion, which are often not explicitly disclosed, trials that are actively terminated usually require the termination reasons to be stated in public databases, providing a clearer research subject.

Previous analyses of clinical trial failures have mostly focused on trials that were completed but not successful, with reported efficacy-related failure rates of approximately 50%.The picture for actively terminated trials is different:They may be terminated due to commercial factors such as strategic adjustments, funding shortages, or changes in the competitive environment, or stopped due to non-scientific reasons like recruitment difficulties or operational issues. Understanding the reasons and trends behind these voluntary terminations is of great significance for optimizing the drug development process and reducing unnecessary resource waste. The research team utilized the Epistemic AI database, integrating publicly available clinical trial information, to systematically analyze all Phase II and Phase III trials sponsored by the industry that were voluntarily terminated between 2013 and 2023, aiming to provide insights for improving trial design and execution success rates.

The research team identified all industry-sponsored Phase II and Phase III clinical trials that were actively terminated between 2013 and 2023 from the Epistemic AI database. The data shows,The absolute number of terminated trials has shown a significant upward trend: increasing from 209 in 2013 to 435 in 2023, more than doubling.More importantly,The termination rate (the proportion of trials terminated among all trials completed in a year) also increased from 11% in 2013 to 23% in 2023.This means that almost one in every four trials within the industry will be actively terminated before completion.

Figure: Trends in Clinical Trial Terminations by Phase from 2013 to 2023

(Source: Nature Reviews Drug Discovery)

In 89% of the trials that provided a reason for termination, the research team discovered an unexpected dominant factor.Strategic and business reasons accounted for 36% of all termination cases, becoming the primary reason for termination.These reasons include: the performance of competitor drugs, reassessment of the potential of the same candidate drug in other indications, adjustments to the commercial value of the drug, portfolio restructuring after mergers, acquisitions, or licensing deals (such as avoiding redundancy of similar candidate drugs), and financial issues of sponsors such as funding shortages. The research team combined "strategic" and "commercial" for statistical purposes due to the ambiguity in how companies use these two terms in their reports.

In contrast,Efficacy issues account for only 24% of termination cases.This proportion is significantly lower than the previously reported efficacy-related failure rate of approximately 50%, but the research team emphasized that this is because the study focused solely on trials that were actively terminated, rather than including all completed but failed trials. Efficacy issues here specifically refer to "failure to meet pre-specified endpoints" or "lack of drug response," which led to termination decisions based on interim analyses or preliminary data indicating suboptimal drug performance.Enrollment issues ranked third, accounting for 18%., reflecting the substantial impact of difficult patient recruitment on trial execution. Additionally,Operational issues account for 7%, while safety issues account for only 5%.Notably, 10% of trials still did not provide reasons for termination, with most of these cases occurring before 2016; the U.S. Food and Drug Administration (FDA) issued a mandatory requirement in 2016 stipulating that all terminated trials must provide reasons for termination starting from 2017.

Further analysis by trial phase revealed more nuanced trend differences.In Phase II trials, the proportion terminated due to strategic and commercial reasons sharply increased from 1.8% in 2013 (accounting for 38% of Phase II terminations that year) to 8.1% in 2023 (representing 55% of Phase II terminations).Especially the growth has been the most significant in the past two years.Phase III trials also showed a similar but relatively moderate trend, with strategic and business terminations increasing from 1.3% in 2013 (accounting for 33% of Phase III terminations) to 3.5% in 2023 (accounting for 43% of Phase III terminations).This indicates that regardless of the trial phase, the influence of strategic and commercial factors is increasing, but the impact on Phase II trials is more pronounced.

Figure: Trends in Phase II and Phase III Clinical Trial Terminations from 2013 to 2023 (Source: Nature Reviews Drug Discovery)

Efficacy-related terminations showed an increasing trend in both phases.The efficacy termination rate in Phase II trials increased from 0.8% in 2013 to 2.7% in 2023, while in Phase III trials, it rose from 1.1% to 2.9%.Despite the industry's continuous efforts to mitigate the risk of efficacy failure through strategies such as validating drug targets with human genetic evidence, this trend indicates that efficacy issues remain a persistent challenge to overcome.Another noteworthy trend is the recruitment issue in Phase II trials: increasing from 0.9% in 2013 to 2.0% in 2022, while the termination rate due to recruitment issues in Phase III trials remained largely stable during the same period.This discrepancy raises a question: Why is recruitment more challenging in Phase II trials and less so in Phase III? The research team believes this may be related to the recent "crowding" phenomenon of developing multiple cell and gene therapies for single-gene diseases, leading to an over-competition for these rare patient populations.

The strategic and business reasons revealed by the study as leading to the termination trend reflect the deep structural challenges faced by the pharmaceutical R&D industry. The research team analyzed multiple factors that may contribute to this trend, with the most significant beingCompany Size Differences. Data shows,The strategic and commercial termination rate of the top 20 pharmaceutical companies is 27%, while for the remaining companies, this rate reaches 34%.This gap suggests that small biotech companies, in a financially strained funding environment, are more inclined to streamline their R&D portfolios to preserve resources. In recent years, the financing environment in the biotech sector has remained under pressure, with many startups facing cash flow challenges and having to make tough priority decisions, abandoning some unfinished clinical trial projects.

Another factor worth considering is the potential role of "herding" in trial terminations. In an analysis published in 2022 in Nature Reviews Drug Discovery, Fougner et al. noted the growing trend of multiple companies developing candidate drugs around popular targets, particularly in the field of oncology.When a candidate drug targeting a specific target fails in trials, other candidate drug trials targeting the same target may also be terminated due to risk mitigation strategies.Although such chain reactions may be classified by companies as "strategic and commercial decisions" without further elaboration on specific reasons, if the clustering effect does indeed make a substantial contribution to termination rates, this would support an important argument: drug candidates entering later-stage trials should exhibit greater target diversity to avoid a "one loss, all losses" scenario. Moreover, changes in the competitive landscape—such as the regulatory approval of similar drugs—can also lead companies to terminate trials of comparable drug candidates to mitigate commercial risks arising from intensified market competition.

Although the issue of efficacy is not the main driver of the increase in termination rates, the absolute growth in numbers still warrants attention.Despite continuous advancements in target validation strategies within the industry, such as leveraging human genetic evidence to screen for drug targets with higher chances of success,The proportion of efficacy-related terminations has increased in both Phase II and Phase III trials. This suggests that current strategies may not yet fully address the challenge of efficacy prediction, or that as the total number of trials increases, the absolute number of efficacy failures also grows. The research team recommends conducting supplementary analyses on completed but failed trials due to efficacy reasons, which will help provide a more comprehensive understanding of the actual impact of current strategies on efficacy failures.

Special Growth Trends in Recruitment Issues During Phase II TrialsReveals Unique Challenges in the Field of Rare Disease Drug Development. Fougner et al.'s research points out that for nine single-gene diseases, there are currently more than 10 candidate drugs in clinical development. However, considering the low prevalence of these diseases, it is almost impossible for all ongoing trials to fully recruit enough patients.The rapid development of cell and gene therapies has brought hope to patients with rare diseases, but it has also led to an over-competitive environment among patient groups, with multiple trials vying for a limited number of eligible participants.This phenomenon was more prominent in Phase II trials, possibly because the enrollment criteria for Phase II trials were stricter, or it could be that companies had already anticipated recruitment difficulties by the Phase II stage and opted to terminate early, avoiding further resource investment in Phase III. In contrast, terminations due to operational and safety issues remained stable throughout the study period, accounting for less than 2% of the total number of trials completed each year, indicating that these factors are not systemic challenges faced by the industry.

These findings collectively point to a core insight:Trial terminations due to strategic or commercial reasons, compared to issues of efficacy or safety, may be more easily controlled and optimized by the sponsor.Understanding the specific components of these reasons—whether financing pressure, portfolio restructuring, or herding effects—will help reduce unnecessary trial initiations or make "continue or terminate" decisions earlier, thereby minimizing the waste of already invested resources. This optimization is particularly valuable for costly Phase III trials.

This systematic analysis, spanning a decade, reveals thatStrategic and commercial reasons have become the main drivers for the early termination of clinical trials.This trend is driven by the interplay of multiple factors, including a tightening financing environment, restructuring of R&D portfolios, and excessive concentration on certain targets. Contrary to the traditional perception that efficacy and safety issues primarily lead to trial failures, trials that are actively terminated are more often influenced by optimizable commercial decisions.

A deep understanding of the specific reasons behind these strategic and commercial terminations will provide valuable decision-making support for drug development companies, helping them to more prudently evaluate market competition, target diversity, and resource sustainability before project initiation, thereby reducing unnecessary investment waste.For the entire drug R&D ecosystem, this not only means improved efficiency but also represents a more responsible use of limited innovative resources.