Following a Food and Drug Administration rejection earlier in the year, ARIAD Pharmaceuticals' (NASDAQ:ARIA) partner Merck (NYSE:MRK) has withdrawn its application for approval of their cancer drug ridaforolimus in the European Union. Merck withdrew the application after the reviewers made it clear the drug wasn't going to get approved, a pretty standard operating procedure for drugs about to be rejected in the EU.

Is ridaforolimus dead? In soft tissue sarcoma or bone tumors, perhaps. The drug seems to work, offering a 21% improvement in progression-free survival. Unfortunately, that equates to just 3.1 weeks, causing the side effects to become a more important aspect of the risk-benefit analysis. Both agencies apparently thought the arbitrary analysis didn't tip the scale in favor of using the drug, at least for those indications.

Merck is testing ridaforolimus in other cancer types including breast cancer, a pretty large market. Only time will tell, but investors shouldn't count the drug out for those added indications. Ridaforolimus works in the same way asĀ Pfizer's (NYSE:PFE) Torisel and Novartis' (NYSE:NVS) Afinitor, which are both approved for treating kidney cancer; Merck is testing the drug against that tumor type as well.

Neither company is completely dependent on ridaforolimus getting approved. Merck is obviously a large company with multiple different opportunities. And ARIAD has a date with destiny in March as the FDA reviews its leukemia treatment ponatinib, although the decision could come even earlier give the rolling submission.

An approval for ponatinib looks pretty likely. In patients that failed Novartis' Tasigna, or Otsuka (OTC: OTSKF) and Bristol-Myers Squibb's (NYSE:BMY) Sprycel, or who have a mutation that doesn't allow them to be treated with those drugs -- in other words their running out of options -- the drug produced a major cytogentic response in more than half of the patients.

Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.