My unofficial count of drug developers vs. lung cancer this month shows that cancer is unfortunately winning the battle. In March, it looked like a 16 seed versus a No. 1, as the deadly disease chewed up four more potential treatments.

Drug

Company

Clinical Trial

Result

figitumumab

Pfizer (NYSE: PFE)

Phase 3 in combination with Roche and OSI Pharmaceuticals' (Nasdaq: OSIP) Tarceva.

Trial stopped early because there was little chance of it working.

mapatumumab

Human Genome Sciences (Nasdaq: HGSI)

Phase 2 in combination with chemotherapy.

No difference in disease response between combination and chemotherapy alone.

NOV-002

Novelos Therapeutics

Phase 3 in combination with chemotherapy.

No difference in disease response between combination and chemotherapy alone.

ASA404

Antisoma and Novartis (NYSE: NVS)

Phase 3 in combination with chemotherapy.

Trial stopped early because there was little chance of it working.

Source: Company press releases.

Buyer beware
Lung cancer is tough to beat. The drugs above weren't even trying to beat the current treatments. All they needed to do was boost the activity of current options, but the experimental compounds couldn't even do that.

The low success rate should be a wake-up call for anyone investing in the space. There are nearly 150 active phase 3 clinical trials testing treatments for lung cancer. Given the current success rate, I wouldn't count on too many of them making it to market.

Even Eli Lilly (NYSE: LLY) and Bristol-Myers Squibb's (NYSE: BMY) Erbitux, which passed its phase 3 trial, has had trouble getting approved to treat lung cancer. The trial was run by their European partner, Merck KGaA, and the Food and Drug Administration has questioned the comparability of the drug produced by German Merck and the drug sold in the U.S. Erbitux's approval for lung cancer is also stalled in Europe, where regulators said they were worried about an increase in heart problems in older patients.

Given how hard it seems to be to get a drug for lung cancer approved, sales of current treatments like Tarceva, Roche's Avastin, and Eli Lilly's Alimta seem fairly safe for now.

The Cinderella story
There was one winner in the battle against lung cancer this month. Abraxis Bioscience's (Nasdaq: ABII) Abraxane successfully bested Bristol-Myers Squibb's Taxol in treating lung cancer when both were combined with carboplatin. Abraxis didn't give details of Abraxane's improvement in overall response compared to Taxol, but the trial was part of a special protocol assessment (SPA) with the FDA, so an approval is likely once Abraxis files for the additional indication.

Abraxane is a reformulation of Taxol where the drug is covered in albumin, which helps increase its activity. Abraxane beat Taxol previously in breast cancer patients, so there was certainly hope that it could do the same in lung cancer. But given how hard lung cancer has been to treat, investors were certainly justified in keeping the stock down until the drug was proven to work. The stock shot up 30% after Abraxis announced the top-line results.

With risk comes reward
As Abraxis' upward movement points out, there's lots of money to be made in difficult-to-treat diseases. As another example, Human Genome Sciences went from less than $1 to more than $30 after a pair of clinical trials proved that Benlysta worked in difficult-to-treat lupus.

The prospects of a 30-bagger may sound exciting, but investors have to be very clear about the high risks of investing in this space. It's difficult to know which drugs might pass. The three phase 3 drugs that failed this month had phase 2 data that was strong enough to get them to the next level. Keep your investment in the space to a reasonable portion of your portfolio, and you'll be able to breathe after the inevitable flop.