Complex sentence: When a drug fails at this stage, the financial losses can be catastrophic, but using the traditional model of pre-clinical development it is difficult to predict side effects that occur at a low frequency, side effects which can cause the trial to fail.
Split into simpler sentences: When a drug fails at this stage, the financial losses can be catastrophic. The traditional model of pre-clinical development has difficulty predicting low-frequency side effects, which can cause the trial to fail.