On Monday, budding development stage pharma Exelixis (NASDAQ:EXEL) announced its third-quarter financial results and updated investors on what they can expect for the rest of the year.

Exelixis currently has a whopping 14 drugs in clinical stage development in its pipeline, with three of those in phase 2 testing. That number is only going to grow next year, as Exelixis will reveal its plans for the next compounds to start human testing during its research and development day on Dec. 5.

It wasn't all rosy for Exelixis' pipeline in the third quarter, though. The company reported negative study results for phase 2 candidate XL784 in October. The drug failed to show a statistically significant improvement in treating diabetic nephropathy. As Exelixis clarified on the conference call, XL784 isn't dead yet, as this was only an exploratory phase 2 study, and the statistical criteria for any drug's continued development aren't nearly as stringent in phase 2 testing as in phase 3 studies.

Speaking of XL784, partner GlaxoSmithKline (NYSE:GSK) will make a decision on whether to pick up development of the drug by "mid January." Glaxo's decision on whether to take over development of cancer therapeutic XL880 is still expected in "mid December." This is the compound for which Glaxo asked to have the review period sped up, which argues positively for its odds of getting picked up.

The oncology compound that Glaxo rejected in June, XL647, is slated to begin phase 3 testing in non-small cell lung cancer (NSCLC) patients by the middle of next year. The molecular cancer target that XL647 hits has received a lot of attention lately, after ImClone Systems (NASDAQ:IMCL) reported very positive results of its related drug in NSCLC patients in September.

Exelixis expects to end 2007 with at least $270 million in cash and investments on its balance sheet. Considering the numerous compounds that will be entering mid- and late-stage studies next year, this cash won't last long.

On the third-quarter conference call, Exelixis stated that if Glaxo doesn't take over development (and the costs that go with it) of some of the compounds covered in their partnership deal, it will have to prioritize its development activities going forward and find other partners for some of its compounds.

As long as Exelixis produces robust efficacy data for its drug candidates, finding new development partners should be no problem even for the Glaxo-rejected compounds.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.