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When there is a predictive biomarker, enrichment can focus the clinical trial on a benefiting subpopulation. We describe a two‐stage enrichment design, in which the first stage is designed to efficiently estimate a threshold and the second stage is a "phase III‐like" trial on the enriched population. The goal of this paper is to explore design issues: sample size in Stages 1 and 2, and re‐estimation of the Stage 2 sample size following Stage 1. By treating these as separate trials, we can gain insight into how the predictive nature of the biomarker specifically impacts the sample size. We also show that failure to adequately estimate the threshold can have disastrous consequences in the second stage. While any bivariate model could be used, we assume a continuous outcome and continuous biomarker, described by a bivariate normal model. The correlation coefficient between the outcome and biomarker is the key to understanding the behavior of the design, both for predictive and prognostic biomarkers. Through a series of simulations we illustrate the impact of model misspecification, consequences of poor threshold estimation, and requisite sample sizes that depend on the predictive nature of the biomarker. Such insight should be helpful in understanding and designing enrichment trials. [ABSTRACT FROM AUTHOR]