A Beginners Guide To Clinical Trials

In the world of cannabis biotechs, clinical trials are a regular occurrence. However, for the average investor, they can often contain confusing terminology that isn't easily digestible. That's why we've written this guide to clinical trials.

The cannabis plant has been used for medicinal purposes for thousands of years, however, due to the War on Drugs, research around the plant has been stifled and very few studies have been performed.

In recent years, however, the stigma surrounding cannabis is beginning to wash off, medicinal cannabis programs are gaining traction globally and we're seeing that there are indeed many therapeutic benefits to the plant.

As a result, more and more companies are searching for new ways cannabis can be used for medicinal purposes, whether it be for inflammation, chronic pain, epilepsy, brain injury, or for something else not yet considered. And in order for companies to find out whether or not cannabis is effective to treat a specific ailment, they have to undergo drug development and conduct clinical trials.

Drug development is the process of firstly choosing a compound that developers believe will provide therapeutic value to a certain ailment. Once the compound has been chosen, it must then be characterized – meaning researchers have to determine the size, shape, strengths, weaknesses, and toxicity of the compound and how well the body tolerates it.

From there, drug developers have to come up with a formulation of the compound into a marketable drug that can be transported safely, and that doesn't lose potency or develop toxicity. From there, developers may move onto the final and most important phase of drug development, clinical trials, which will determine the efficacy of the drug on the targetted ailment.

Any research study that prospectively assigns human participants or groups of humans to one or more health-related interventions to evaluate the effects on health outcomes. The World Health Organization's (WHO) definition of a clinical trial

Clinical trials are performed in several phases, which are as follows:

Phase I 

Phase I studies are designed to determine the safety of a drug or device. Typically phase I studies will take several months to complete, and often include 20 to 100 healthy volunteers. The study will then look into how the drug is absorbed, metabolized, and excreted while investigating potential side effects as dosage increases. Roughly 70% of experimental drugs pass this phase of testing.

Phase II 

Phase II studies are designed to test the efficacy of a drug or device. Phase II testing can last much longer than Phase I, from several months up to years, and can involve several hundred patients.

Most studies in Phase II are "randomized" trials in which one group of patients receives the developmental drug, while a second "control" group receives a placebo. These studies can also be "double-blind" which means that neither the patients nor those carrying out the research are aware of who has received the developmental drug. Double-blind studies give regulators a comparative look at the drug's safety and efficacy while removing bias and the likelihood for the placebo effect to occur.

Phase III

Phase III studies are again randomized and double-blind, however, these will often involve several hundred to several thousand patients. Phase III testing can last several years and are designed to determine the therapeutic effect in patient populations for which the drug is intended. For example, if a company wants to create a cannabinoid-derived drug to cure sleeping disorders, their phase III trials will likely use patient populations with insomnia. Phase III trials show legislators the risks and benefits associated with the developmental drug, and upon completion, means that drug developers can apply for approval by a regulatory agency such as the FDA or TGA.

Phase IV 

Phase IV studies, often called Post Marketing Surveillance Trials, occur once a drug has been approved for consumer sale. Phase IV is designed to compare the drug with competitors and to see the long term efficacy, and cost-effectiveness of the drug.

Once you understand the various phases of clinical drug trials, things should start to make a little more sense. However, there's still plenty to learn.



To understand P-values, you first have to learn about the differences between a null hypothesis and an alternate hypothesis.

A null hypothesis, as the name suggests, is when a drug has no difference in effect when compared with a placebo or a competitor's drug. An alternate hypothesis is the opposite to a null hypothesis- meaning that the drug yields different effects than a placebo, for better or for worse.

For example, if you were creating a drug for weight loss, the null hypothesis would be that the drug has no meaningful impact on weight loss, and the alternate hypothesis would be that the drug does have a meaningful impact on drug loss.

Now that's out of the way, a P-value is simply the probability that the null hypothesis will come true.

For example, if the value of the p-value is 0.25, then there is a 25% probability that there is no real increase or decrease in weight due to the drug. If the value of the p-value is 0.04 then there is a 4% probability that there is no real increase or decrease in weight as a result of the new drug. In essence, the lower the p-value, the more confident the company is that the alternate hypothesis is true, and the drug will have an impact. In most fields, acceptable p-values should be under 0.05.

Vehicle Control

When we talk about vehicles, we aren't talking Ford or Tesla. Instead, when conducting clinical trials on drugs, a vehicle refers to the substance in which the drug is carried, such as in oil or saline.

In a vehicle-controlled study, the substance is used alone, administered in the same manner as it would be with the experimental compound in order to determine whether the vehicle alone causes any effects.


A clinical trial endpoint is fairly self-explanatory and is often a primary set of metrics that determine the efficacy of the drug. Some examples of drug endpoints might be survival, improvements in quality of life, relief of symptoms, and so on.

Endpoints can then be split into being either primary and secondary. For example, if you are creating a drug that is designed to improve cancer survival rates, your primary endpoint is to look at survival rates.

Alternatively, your secondary endpoint is an additional point of interest from using the drug that perhaps wasn't even intended, such as reduced seizures or tumor size.

So that's it, you're now up to speed on the basics of clinical trials, and will now hopefully be able to better understand what cannabis biotechs are doing and why they're doing it.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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