Capital Efficient Trials in a Time of Economic Uncertainty

by Tony Proctor¹

In the current climate of capital constraints, tariffs and policy uncertainty, and changing regulatory dynamics, pharma and biotech companies should address not just whether a trial will succeed but also their likely return on investment. This is particularly true in complex and traditionally expensive therapeutic areas, such as oncology.

As CFO of a global CRO, I’ve worked with numerous sponsors across indications, geographies and funding stages. I’ve seen many potential new therapeutics with sound scientific merit. But I’ve also seen that the most capital efficient ones have a well-grounded operational and financial strategy defined early on.

For companies preparing to initiate a Phase II or III study, the decisions made prior to launch often determine capital burn rate, investor confidence and even impact the likelihood of study success. Regardless of whether it’s a pivotal study or not, every trial in this current environment must be designed for efficiency, risk reduction and maximum return on investment.

Capital Efficiency Starts with Strategic Trial Design

Prior to spending money on site activation or vendor onboarding, the protocol already sets the financial tone. Protocol complexity is a leading driver of trial cost and timeline variability. Every extra procedure, data point, and exploratory endpoint adds monitoring, data cleaning and site burden.

For instance, a sponsor designing a study can easily propose multiple exploratory endpoints. It’s important to ask whether the possible future benefit outweighs the increased study complexity and cost per patient that is incurred now.

It’s helpful to ask these questions: what is the minimum viable protocol that delivers a strong signal for go/no-go or partnering decisions? Is the protocol designed for scientific curiosity or regulatory and commercial impact? What is the likelihood of additional exploratory endpoints leading to potential future study success?

Financial Metrics Can Guide Decisions

Study budget holders need to demonstrate capital efficiency to their CFO or investors. That means using the right financial metrics. These include cost per patient enrolled (normalized for geography, screen failure rates, and dropout risk) along with burn rate, and ideally tracked against milestones rather than calendar months. To flag inefficiency, budget variance should be monitored across categories like site performance and patient reimbursements. Time to data lock or readout is another critical variable, as delays directly impact asset valuation in models like discounted cash flow and reduce the useful life of patent exclusivity. By focusing on these measures, sponsors can maximize for efficiency and deliver the highest probability ROI per dollar spent.

CRO and Vendor Model Selection Must Match the Mission

Ultimately, the choice of CRO partner is among the most important a sponsor makes. But sponsors sometimes misalign their outsourcing model to their actual needs. The truth is there is no universally “best” model. The right one for each asset and internal structure depends on any one company’s situation: partnering with a full-service CRO make sense when internal bandwidth is limited and time-to-first-patient is critical, while FSP or hybrid models work when sponsors want tighter control over strategy, scientific leadership or geographic oversight.

Choosing a model for convenience or familiarity rather than fit can inflate cost and delay milestones. Trials can easily incur major change orders simply due to scope misalignment.

Moreover, it’s important to think early about partner selection and scenario planning, build flexible scopes and establish clear rules for escalation and change control.

De-Risk by Optimizing Site Economics

Site performance is one of the most variable cost centers in clinical trials. Cost per site (including startup and monitoring) and enrollment velocity are among the largest determinants of trial timelines and burn rates.

One effective strategy is to pre-qualify a smaller number of high-performing sites with proven experience in the indication and using past enrollment curves and screen failure data to model likely throughput.

Of course, retention also matters due to the outsized expense of dropouts. Budgets should therefore address patient support, remote visits and flexible visit windows to maximize dataset completeness.

Global Execution by Design

Sponsors often treat Asia-Pacific and Australia as a backup plan when enrollment lags. In reality, this is a counterproductive strategy that misses leveraging significant opportunities from these regions. Countries like Australia, for instance, offer regulatory speed and tax incentives that can materially reduce time and cost per enrolled patient with the proper local infrastructure in place. Other countries throughout the region offer a wealth of potential patients and sites experienced in specific therapeutic areas.

The key is to work with a global CRO partner who can provide multi-country specific guidance, has the right regulatory expertise and well-established regional network infrastructure. In such instances, the CRO is actually the enabler of both executional and financial efficiency.

Forecasting is Risk Management

Most sponsors look at forecasting as a matter of finance. But it is also a function of risk management. Trial delays and cost overruns can just as well stem from overly optimistic assumptions as they can from bad execution. Forecasts ought to be anchored to operational benchmarks, ideally created in collaboration with the CRO partner. From experience, I have seen that alignment on key dates and milestones between sponsor and CRO is often a critical success factor that leads to meeting board expectations. A good forecast incorporates enrollment rate distributions (not just averages), regional startup timelines (if conducting multinational studies), regulatory buffers, site and vendor capacity constraints, and realistic site activation lag.

Efficient forecasting leads to fewer surprises and faster, more effective responses. This is among the simplest forms of de-risking studies.

Capital is a Scarce Resource

Every trial is as much an investment thesis as it is a scientific endeavor. And in a constrained capital environment, executives must show that their study outperforms the alternatives. Will this trial get to a key value milestone faster than other options? Do the returns justify the level of risk, or is the study spending too much for too low a chance of success? Does the study create a clear path to regulatory submission or a deal with a partner, or will it raise more questions than it answers? And finally, does this trial support the broader strategy, central to the company pipeline, or just a side bet? These questions help ensure limited capital is going to the programs with the highest potential return.

Efficiency and Risk Reduction are Strategic Choices

Capital efficiency and risk reduction are strategic choices made early in the planning process. They are about making smart decisions from day one. Efficient trial design is cheaper. Efficient partnerships are faster. Efficient forecasting avoids chaos. And efficient capital allocation improves the odds of success while preserving runway.

There is no better time than now to run smarter trials. In the current environment, capital isn’t gone, but it is more selective. And it’s waiting for the companies that know how to deploy it wisely.

1. Tony Proctor is CFO of Emerald Clinical Trials. He is an expert in financial strategy, corporate finance, M&A, global systems integration, and private equity partnerships. With over 25 years of financial leadership experience, he has held financial leadership roles at Lexitas, Parexel, and Syneos (formerly INC Research). ↩︎