With the Digestive Disease Week meeting happening this week, it's been an informative period for Protein Design Labs (NASDAQ:PDLI) shareholders. As is often the case with drug companies, we'll have to take the bad with the good.

On Monday, the company announced that daclizumab did not have clinical activity in a phase 2 trial in patients with moderate to severe ulcerative colitis. Protein Design Labs will not pursue further development in this indication, though it's continuing with plans to conduct phase 2 trials in asthma and multiple sclerosis. Protein Design Labs has said on numerous occasions that it would like to get another company as a partner for this drug. That makes sense, as it is now outside of the firm's focus on inflammatory bowel disease and oncology.

In its conference call on Wednesday, some additional information was also provided on the HuZaf program in the treatment of Crohn's disease. In phase 2 trials, HuZaf did not show statistical significance versus a placebo after a single dose. However, when a second dose was used, there were some statistically significant results in patient responses and remissions. An additional trial is ongoing to determine if four doses will have a greater clinical benefit.

I think it remains to be determined if HuZaf is a viable drug program given that it will have to compete with other biologics such as Johnson & Johnson's (NYSE:JNJ) Remicade. I would not be surprised if the HuZaf program is terminated, but I think the data from the current multidose study will need to be gathered before that decision is made.

To end on a high note, the jewel in Protein Design Labs' crown is clearly Nuvion. Nuvion is in early clinical development for the treatment of severe ulcerative colitis. It is rare that I get excited about drugs prior to phase 2 efficacy data, but the results so far with Nuvion seem particularly compelling.

Patients with severe ulcerative colitis that is not responding to medication face surgery to remove their colon. That's certainly not a pleasant thought. In this seriously ill patient population, the highest dose of Nuvion used resulted in eight out of eight patients having disease remission, with 63% of these patients relapse-free after 12 months. That is an impressive result in patients who don't have attractive treatment options. Protein Design Labs is fine-tuning the dose it wants to use in a registration trial that could begin in early 2005.

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Fool contributor Charly Travers owns shares of Protein Design Labs.