Phase III clinical trials represent the last and most pivotal test in the drug development and approval process. This last step assesses the effectiveness and safety of a drug on humans, using a population sample that can be in the thousands.

These tests are the largest, most comprehensive, and most expensive in the process, and it takes years of research and positive preliminary testing to get up to Phase III. If Phase III results are significant and the company believes they have met all potential regulatory concerns, the company will then submit the drug to the FDA for marketing approval.

According to Thomson Reuters, companies have recently had more difficulty surpassing PhIII and submitting new drugs to the FDA.

They found that from 2008-2010, 55 projects were terminated at the PhIII stage, which is more than double the level for 2005-2007. They believe this reflects increased difficulty in competing with existing drugs.

This PhIII data is part of a greater trend in which PhI and PhII trials fell 47% and 53%, respectively for 2010. The number of drugs entering PhIII fell by 55% in 2010. However, total sales from drugs in 2010 reached an all-time high of $856B, but that will likely be hit by the expiration of patents over the coming years.

But there is a silver lining. Although biotech firms have become more cautious in entering costly PhIII studies, firms that do are more certain in their experimental drugs. Reuters also mentions that Anti-Cancer has increased the number of drugs in development.

Phil Miller, product director at Thomson Reuters, said, "High failure rates continue to be of great concern to the industry and this is compounded by the decrease in NMEs [New Molecular Entities] earlier focus on clearing out weak drug candidates will be instrumental to successfully progressing drugs to market."

Here we report three drugs that have recently had positive Phase III results, presumably right on their way to FDA review. We listed the biotech companies behind these names, as well as descriptions of the results.

Do you think these companies will get their drugs through the FDA approval process? (Click here to access free, interactive tools to analyze these ideas.)

1. Bristol-Myers Squibb (NYSE: BMY) and AstraZeneca (NYSE: AZN):


In a Phase III clinical study reported on June 25, Bistol-Myers' and AstraZeneca's investigational drug dapagliflozin plus metformin had significantly lowered blood sugar levels in a group of adults with type 2 diabetes compared to placebo groups.

However in another study of dapagliflozin, there was a higher incidence of breast and bladder cancer than in the placebo group, which is of concern to the company. ISI Group analyst Mark Schoenebaum told Bloomberg, "The dapagliflozin cancer findings will be a topic at a U.S. Food and Drug Administration advisory panel on July 19 ... but I'd be very surprised if this blocked approval."

Thomson Pharma has estimated potential 2015 sales of $631 million.

2. Pfizer (NYSE: PFE) and Bristol-Myers Squibb:


Blood thinner apixaban from Pfizer and Bristol-Myers appeared more effective and safer than competing drug warfarin in a Phase III study, reported June 22. Apixaban was more effective in preventing strokes in patients with irregular heart rhythms, while also causing less major bleeding than warfarin. Analysts have predicted annual sales of $2 to $5 billion.

3. Incyte (Nasdaq: INCY) and Novartis (NYSE: NVS):


A Phase III trial of ruxolitinib to reduce spleen size in patients with myelofibrosis (a blood cancer that often causes the spleen to enlarge) showed that the drug was successful in reducing spleen size by at least 35% in over a quarter of patients, reported on June 4. This was associated with improved quality of life and functioning, with the most common side effects being low platelet count and low hemoglobin levels. Annual sales for ruxolitinib predicted by analysts are at $592 million for Incyte and $357 million for Novartis by 2015, according to Thomson Pharma. On June 6, Incyte submitted a New Drug Application (NDA) to the FDA for the drug.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.

Kapitall's Andrew Crawford does not own any of the shares mentioned above.