Exelixis (NASDAQ:EXEL) spiked up 23% Monday after its partner Roche (OTC:RHHBY) announced that the duo's cancer drug passed a phase 3 trial. Some speculation about a potential buyout by Roche also seems to have contributed to Exelixis' increased value.

Let's cover both.

First the data
The phase 3 trial tested Exelixis' cobimetinib combined with Roche's already-approved Zelboraf compared to Zelboraf alone in melanoma patients whose tumors contained a BRAFV600 mutation. Here's what we know from the press release about how long the patients lived without their tumors growing (called progression-free survival):


Cobimetinib + Zelboraf


Progression-Free Survival

X months

Y months

X is larger than Y.

That's all we know. Roche is holding onto the actual data -- with numbers and all -- for an upcoming medical meeting.

How can so little information drive the share price so high? Investors are making an educated guess that the cobimetinib-Zelboraf combination is better than a combination of two drugs from GlaxoSmithKline (NYSE:GSK) -- Mekinist and Tafinlar -- approved to treat melanoma patients whose tumors have BRAFV600 mutations. Mekinist is a MEK inhibitor like Exelixis' cobimetinib and Tafinlar is a BRAF inhibitor like Roche's Zelboraf.

In a clinical trial, the two GlaxoSmithKline drugs produced a 9.3 month  progression free survival for patients who hadn't been treated yet. In Roche's phase 1 trial, the cobimetinib-Zelboraf combination produced a 13.7 month progression free survival in patients who hadn't been previously treated.

There are a lot of caveats here. You're comparing two independent trials that may not have exactly the same patient population. And phase 3 trials often fail to live up to high expectations seen in phase 1 trials.

A more conservative view is to look at the previous trial testing Zelboraf alone, which produced a 5.3-month progression free survival in a clinical trial of patients who hadn't been previously treated . We know the cobimetinib-Zelboraf combination beat Zelbofaf alone in its own trial, so it's safe to assume that the progression-free survival will be higher than that.

Whether it exceeded Mekinist and Tafinlar's 9.3-month progression-free survival is difficult to assess. Matching GlaxoSmithKline's result would be a 75% improvement on Zelboraf alone, which seems like it would be statistically significant with nearly 500 patients in the trial.

More speculation
As if clinical trial comparisons was bad enough, we've also got questions about whether Roche might buy Exelixis. The biotech gets 50% of the profits from the first $200 million of U.S. sales of cobimetinib, which steps down until sales exceed $400 million and Exelixis get 30% of the profits from U.S. sales. Overseas, Exelixis gets a low double-digit royalty .

If we assume the deal terms work out to about 20% of sales, Roche needs $4 billion in sales over the life of the product to break even at Exleixis' current valuation. Zelboraf sales in the first quarter were around $88 million, which isn't bad, but would require 11 years to recoup the cost of buying Exelixis. If you assume the combination works well enough to make it a blockbuster -- $500 million for each drug -- the time to recoup the cost is down to eight years. Milestone payments that Roche might avoid paying by acquiring Exelixis could shave off even more time.

Of course Exelixis has more than just cobimetinib. Exelixis' Cometriq is already on the market although sales are paltry since it treats an uncommon late-stage thyroid cancer. But the biotech is expecting results from phase 3 trials testing Cometriq in prostate and renal cell cancer later this year.

Investors should be focusing on those trials rather than a potential takeout of Exelixis. If positive, they're likely to raise the share price higher than any premium Roche is willing to give Exelixis.