This week, drug developer Northfield Laboratories (NASDAQ:NFLD) reported its second-quarter results and gave us a little more info about the phase 3 trial for its only product in development, the blood substitute PolyHeme.

Back in December, when Northfield released results from its phase 3 trial for PolyHeme, its shares fell almost 60% in one day. In the conference call about its quarterly results, Northfield again said it's not giving up on PolyHeme and would eventually apply to the Food and Drug Administration to market the drug.

Northfield also said it would file to offer $100 million of shares in a shelf registration to help shore up its balance sheet and go along with the $52 million in cash and marketable securities it already has. Northfield's management estimated that with the cash on hand now, it had about two years' worth of funds for operations.

On the earnings call, management went into a long explanation about the design of the PolyHeme phase 3 trial and tried to put a positive spin on its results. The fact remains that the results presented thus far don't point to PolyHeme having a good chance of winning regulatory approval or becoming a strong competitor to saline or blood. Furthermore, if PolyHeme was designed to be used as a blood substitute but saline might have outperformed it in clinical testing, then by correlation wouldn't a saline solution be a better blood substitute than PolyHeme?

With the results presented thus far, I just cannot see why any hospital would choose to use PolyHeme over a cheaper saline solution when only those options are presented for restoring lost fluids in trauma victims. And even on the extremely doubtful chance that PolyHeme gets any sort of FDA approval, I can't imagine the label on the product would be anything close to what Northfield hopes for, which is "when an oxygen-carrying fluid is required and red blood cells are not available." So this might be another market-limiting aspect to consider.

Northfield's optimism about its potential PolyHeme application with the FDA just doesn't jive with the agency's conservative nature. Northfield's management was right when it said that this was an "unusual trial in its complexity," but that doesn't alleviate that the company needed positive results from PolyHeme and for it to have demonstrated a medical need for it to reach the market. My bet is that so far, the FDA isn't convinced of either of these things.

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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.