An enhanced understanding of the molecular pathology of disease gained from genomic studies is facilitating the development of treatments that target discrete molecular subclasses of tumours. Considerable associated challenges include how to advance and implement targeted drug-development strategies. Precision medicine centres on delivering the most appropriate therapy to a patient on the basis of clinical and molecular features of their disease. The development of therapeutic agents that target molecular mechanisms is driving innovation in clinical-trial strategies. Although progress has been made, modifications to existing core paradigms in oncology drug development will be required to realize fully the promise of precision medicine.