Apparently Roche's (OTC:RHHBY) phase 3 IMspire170 clinical trial failed.

But you wouldn't know it from looking at the press release page on Roche's website. There's no mention of the results of the study that tested its drugs, Cotellic and Tecentriq, in patients with previously untreated advanced melanoma that has a normal BRAF gene. The late-stage clinical trial was hoping to show that the combination could reduce the risk of progression or death compared to Merck's (NYSE:MRK) Keytruda.

Instead, investors had to hear the bad news from Exelixis (NASDAQ:EXEL), which discovered Cotellic and licensed it to Roche's Genentech unit. The smaller biotech, which gets a share of the profits from the drug's sales in the U.S. and royalties elsewhere, didn't bother to issue a press release either, but at least it disclosed the news of the failure in a four-sentence filing with the Securities and Exchange Commission.

SEC logo with stock results in the background

Image source: Getty Images.

What's material to some isn't to others

Even though the IMspire170 study was arguably more important to Roche -- it has 1.5 drugs involved in the study versus Exelixis' 0.5 drugs, after all -- the important thing investors need to remember is that companies are required to disclose only events that have a material impact.

Roche's lawyers apparently concluded that the results weren't material to its overall business, which seems reasonable given the $15 billion in revenue Roche captured in the first quarter alone. And, for the record, it's not the case that Roche was planning on keeping the failure a secret forever; according to the aforementioned SEC document, Roche told Exelixis that it plans to present the data at an upcoming medical meeting.

Exelixis' revenue might break $1 billion for this year, so positive IMspire170 results could have had a more material effect on the top line, which would explain the disclosure.

Investors seem to be shrugging off the clinical-trial failure, though, with Exelixis' shares trading up for the day around noon. It seems like a reasonable response considering the biotech brought in only $2.5 million from Cotellic in the first quarter; at a little over 1% of total revenue, Cotellic is barely moving the needle for the company.

All is not lost

While Cotellic and Tecentriq couldn't beat Merck's Keytruda in melanoma patients with a normal BRAF gene, there's still hope to expand sales of Cotellic and Tecentriq in melanoma patients with BRAF mutations.

Cotellic is currently approved to treat BRAF-mutation-positive patients in combination with Roche's Zelboraf, but sales have been paltry -- thus the $2.5 million for Exelixis' share of the quarterly profits -- because the combination has to compete with Novartis' (NYSE:NVS) Tafinlar plus Mekinist and Array BioPharma's (NASDAQ:ARRY) Braftovi plus Mektovi, which are also approved to treat melanoma patients with BRAF mutations. Array's duo might become stiffer competition after it gets some marketing muscle from Pfizer (NYSE:PFE), which agreed to purchase the company earlier this week.

Roche is trying to improve the efficacy of Cotellic plus Zelboraf by adding Tecentriq. The phase 3 trial, dubbed IMspire150 Trilogy, will compare the triple combo to Cotellic plus Zelboraf, so the barrier for showing superiority over the control is lower than it was for IMspire170. If Roche can demonstrate that adding Tecentriq lowers the risk of progression or death, the triplet could have a fighting chance against Novartis' and Array Biopharma's doublets.

Data from IMspire150 Trilogy is expected later this year, so it won't be too long before investors know the results.

That is, assuming one of the companies bothers to let investors know.