The Go/No-Go Decision (3/7)
The Go/No-Go Decision: What Leadership Evaluates Before Phase I (3/7)
In the previous posts, we explored how Sponsors reach the Phase I decision point and the 18-36 months of preclinical work required before they can even think about dosing humans. Now we reach the moment that determines whether all that investment progresses forward or gets shelved.
This is the Go/No-Go decision for Phase I. Not a formality, at all!
The Boardroom Moment
Picture this: The preclinical data is complete. The IND is ready to be filed (or perhaps already filed and cleared by Regulatory bodies). The team that's been working on this program for years is eager to move forward. But before they can issue that RFP you'll eventually receive, there's a boardroom conversation happening that you'll never see.
In that room, leadership is asking one fundamental question: Should we commit the next $50-100 million to advancing this asset into Phase I and beyond?
That's not a typo. While your Phase I study alone might cost $3-8 million, leadership isn't deciding whether to spend that amount. They're deciding whether to commit to the entire pathway because approving Phase I creates momentum and expectation that they'll fund Phase II ($20-50 million) and Phase III ($50-100+ million) if the data support it.
The Go/No-Go decision is when leadership evaluates whether this molecule is worth that entire journey.
The 10-Point Decision Package
When leadership evaluates whether to advance to Phase I, they're reviewing a comprehensive decision package. Here's what they're assessing:
1. Scientific Rationale: Does the Biology Support Our Hypothesis?
Does the preclinical data convincingly demonstrate the mechanism of action? Are the animal models predictive of human disease? What's our confidence that drug exposure in humans will achieve the desired biological effect? Have we seen any concerning safety signals that might limit our ability to achieve therapeutic doses?
When your Sponsor seems rigid about protocol elements related to PK/PD assessments or mechanistic biomarkers, it's because these measures are critical to validating (or refuting) the biological hypothesis that justified the entire program. These aren't nice-to-have exploratory endpoints. They're the scientific foundation of the investment decision.
2. Competitive Landscape: What's the Window of Opportunity?
How many competitors are working on similar mechanisms or indications? What stage are competitors at? (If three competitors are already in Phase III, that changes the calculus) What's our differentiation story? (Faster, safer, more convenient, better efficacy?) Do we have intellectual property protection that gives us competitive advantage? What's the timeline to potential approval, and can we be first, best, or differentiated enough to matter?
Timeline pressure isn't arbitrary. If leadership knows competitors are 18 months ahead in clinical development, every month of delay in your Phase I study potentially affects market position and commercial viability. When your Sponsor pushes for aggressive timelines, they're often responding to competitive intelligence you're not privy to.
3. Commercial Potential: Is the Market Opportunity Worth the Investment?
What's the size of the patient population? What's the current standard of care, and what are its limitations? What price can we command if we're successful? What's the peak revenue potential? (Commercial teams have modeled this extensively) What's the patent life remaining when we might reach the market?
If the peak revenue potential is $200 million annually but the total development cost is $500+ million, the business case doesn't work. No matter how elegant the science.
Budget constraints aren't about being cheap. They're about ensuring the clinical development investment is proportional to the commercial opportunity. A rare disease program with limited market potential simply cannot justify the same budget as a large market opportunity.
4. Regulatory Pathway: What's Our Route to Approval?
Is there regulatory precedent for this mechanism/indication? What will FDA/EMA require for approval? (Number of trials, size of safety database, specific endpoints) Are there opportunities for accelerated pathways? (Orphan designation, breakthrough therapy, fast track?) What's our regulatory strategy, and do we have FDA buy-in? (Pre-IND meetings help establish this) What are the regulatory risks that could derail us later?
When your Sponsor insists on specific endpoints or assessment methods that seem unnecessarily complex, it's often because regulatory strategy has already been discussed with FDA. Changing these elements isn't a simple protocol amendment. It could undermine months of regulatory negotiation.
5. Manufacturing Readiness: Can We Make Enough Drug?
Do we have sufficient Phase I material, and what's our plan for Phase II/III material? What's the cost of goods, and is it commercially viable at scale? Are there manufacturing bottlenecks or risks? For biologics: Is our cell line stable and productive? Have we demonstrated consistency across batches? What's our CMC strategy, and have we de-risked the major manufacturing challenges?
When your Sponsor has limitations on drug availability or specific handling requirements, it's because manufacturing is often the hidden constraint in clinical development. Running out of drug or having manufacturing quality issues can completely halt a program.
6. Financial Capacity: Can We Fund the Full Development Program?
What's our current cash position? What's our burn rate, and how long is our runway? Do we have sufficient capital to fund through what value inflection point? (Phase I data? Phase II data? Approval?) What's our plan for additional financing, and how does this program affect our relationship with investors? What other programs are we funding, and how do we prioritize resource allocation?
Many small biotechs are managing limited cash carefully. Committing to Phase I isn't just about the Phase I cost. It's about whether they have (or can raise) the capital to complete the development journey.
Budget pressure is real. When your Sponsor negotiates hard on every line item, it's often because they're managing finite resources carefully. Every dollar matters when you're operating with a limited runway.
7. Organizational Capability: Do We Have the Team and Infrastructure?
Do we have the clinical and operational expertise to execute Phase I successfully? What capabilities do we need to build or acquire? Should we partner with a CRO, and if so, what's our CRO strategy? Do we have the infrastructure to manage clinical operations, data management, safety monitoring, regulatory affairs? What's our plan for scaling up as we move through later phases?
When your Sponsor seems to need more hand-holding than you'd expect, it might be because this is their first Phase I program, or they're a small team stretched across multiple responsibilities. Understanding their organizational maturity helps you calibrate your communication and support approach.
8. Partnership Strategy: Should We Go It Alone or Find a Partner?
Should we out-license this asset to a larger pharma partner now or after Phase I data? What deal terms could we command with Phase I data vs. preclinical data alone? If we partner, what's our role? (Collaborative development? Milestone payments only?) What value does Phase I data add to partnership negotiations?
Sometimes Sponsors rush Phase I because they're in active partnership discussions. Phase I data can significantly strengthen their negotiating position or validate technical assumptions that potential partners care about.
When you hear about tight timelines tied to "strategic milestones," it's often because partnership discussions are happening in parallel with your clinical trial.
9. Risk Tolerance: What Could Go Wrong, and Can We Accept That Risk?
What are the failure modes? (Safety issues? Lack of efficacy? PK problems?) What's our confidence level that we'll see positive signals in Phase I? If we fail in Phase I, what's the impact on the organization? (Career-ending? Company-ending? Just one program among many?) Do we have back-up assets or alternative strategies if this fails? What's the opportunity cost of pursuing this vs. other programs?
Risk-averse Sponsors may seem overly cautious about safety signals or slow to make decisions. But if this is a bet-the-company program, that caution is rational risk management, not excessive concern.
10. Strategic Fit: Does This Align with Our Overall Strategy?
Does this program fit our therapeutic area focus? Does it leverage our organizational strengths and competitive advantages? How does this program interact with our portfolio? (Complementary? Competitive for resources?) Does it support our strategic positioning with investors, partners, and the market?
Sometimes programs get shelved not because the science is bad or the market isn't attractive, but because strategic priorities shift. When that RFP doesn't come, or gets delayed indefinitely, it's often about strategic fit, not your team's capabilities.
What Happens After a "GO" Decision
When leadership says "yes" to Phase I, several things happen immediately:
Budget gets allocated: It's not unlimited, and it's not easily increased. The budget constraints you're navigating reflect real financial commitments.
Timeline commitments get made: Leadership has communicated timelines to the board, investors, and potentially partnership discussions. Your study timeline isn't arbitrary, it's connected to organizational commitments.
Resource allocation decisions get locked: The team members assigned to this program are now unavailable for other opportunities. Your Sponsor's time is committed.
Strategic narrative gets established: Leadership has told a story about this program to stakeholders. That story includes specific milestones, timelines, and anticipated outcomes. Your study is a chapter in that larger narrative.
Expectations get set: Success criteria have been defined. What does Phase I need to show to justify Phase II investment? Those criteria influence how your Sponsor evaluates data as it emerges.
Once Phase I begins, leadership continues monitoring whether the go decision was correct. They're looking for signals that either validate or challenge their investment thesis:
Scientific validation: Are we seeing the PK/PD effects we predicted? Are the biomarker data supporting our mechanism?
Safety profile: Are we seeing the safety profile we expected from preclinical work, or are there concerning signals emerging?
Operational execution: Is the trial enrolling on time? Is the CRO performing as expected? Are we on budget?
Competitive dynamics: What have competitors announced while our trial has been running? Has the competitive landscape shifted?
Market and financing conditions: For biotechs, has the financing environment changed? Are investors still supportive?
Every board meeting includes updates on Phase I progress. Every delay, every safety signal, every budget overrun becomes a board-level conversation about whether to continue investing.
Your Sponsor isn't overreacting when they need frequent updates or respond urgently to issues. They're managing upward to a board that approved this investment based on specific assumptions. When those assumptions are challenged, they need to explain what's happening and what the mitigation plan is.
Not every Go/No-Go decision results in "Go." Programs get stoppedβeven after substantial preclinical investmentβwhen the evaluation suggests the risk/benefit balance doesn't justify proceeding. Common reasons for "No-Go" decisions:
Preclinical toxicity findings that suggest unacceptable risk in humans
Competitive intelligence showing the market opportunity has diminished
Manufacturing challenges that make the cost of goods commercially unviable
Regulatory feedback suggesting the path to approval is longer or more expensive than anticipated
Financial constraints meaning the organization can't fund the full development program
Strategic reprioritization where other programs offer better return on investment
And sometimes, programs that got "Go" decisions get stopped during Phase I:
Safety signals that emerge in humans that weren't predicted by preclinical work
PK/PD data suggesting the drug won't achieve therapeutic effect at tolerable doses
Competitive announcements that change the market landscape
Organizational financial constraints that force prioritization decisions
Partnership discussions that fall through, removing anticipated funding
Practical Application: Before Your Next Proposal
Before you develop your next Phase I proposal, research what you can about the decision context:
About the investment decision:
How long has this program been in development?
What's the competitive landscape?
Is this a bet-the-company program or one of many in the portfolio?
What's the Sponsor's financial position?
About organisational capability:
Is this their first Phase I, or are they experienced?
What's the size and experience level of their team?
What's their relationship history with CROs?
About strategic context:
Are they in active partnership discussions?
Have they made public announcements about timelines?
What strategic milestones are they working toward?
Understanding this context helps you calibrate your communication style and frequency, anticipate which issues will escalate and which won't, position your recommendations in terms that resonate with their strategic reality and build trust by demonstrating understanding of their constraints
Note: This strategic context awareness, knowing how to position yourself as a partner who understands and protects the Sponsor's investment, is exactly what distinguishes PMs ready for PD roles. It's a core focus in clinical research project management mentoring.
In the next post, we'll explore the disconnect between what Sponsors experience (which you now understand deeply) and what CRO PM/PDs typically see when they enter the picture. We'll examine how that disconnect creates misunderstandings and missed opportunities. And more importantly, how to bridge that gap to become the strategic partner your Sponsor is hoping to find.
