Exelixis (NASDAQ:EXEL) rose 10% in after-hours trading Tuesday after releasing third-quarter earnings, but the increase had nothing to do with the revenue it generated.

Sales of its only approved drug, Cometriq, came it at just $6.3 million in the third quarter. The drug is approved only for medullary thyroid cancer, a small indication and not a driver of Exelixis' value.

The real reason
In a separate press release, Exelixis announced positive results from a phase 2 clinical trial in patients with lung cancer who had already failed other treatments.

The trial, run by the U.S. National Cancer Institute, compared Cometriq, Roche and Astellas' Tarceva, and the combination of the two. The Data Safety Monitoring Committee took a planned interim peek at the data to see whether it was worth continuing the trial -- called a futility test -- and lo and behold, patients taking Cometriq and those taking the combination had a "highly statistically significant" increase in progression-free survival, essentially how long the drug was able to keep the tumor from growing while the patient remained alive.

We don't have any numbers on how long the progression-free survival was for any of the treatment arms, but the trial was powered to show a doubling in progression-free survival for Cometriq and the combination compared to Tarveva alone. Since this was an interim look, presumably with fewer progression-free survival events than the initial assumptions were based on, you'd expect the difference would have to be greater than the assumption of a doubling in progression-free survival that the U.S. National Cancer Institute and Exelixis made going into the trial.

But we'll have to wait for the full data to be presented later to know for sure.

Call it a comeback
The lung cancer data is just what Exelixis' shareholders could use, after Cometriq's chances for FDA approval to treat prostate cancer crashed and burned when the drug failed to increase overall survival in that population.

The company halted a second trial testing whether Cometriq could reduce pain in late-stage prostate cancer patients, but it plans to present the data it has so far before the end of the year. There's a slight chance the trial could be positive, despite the lack of full enrollment, and Cometriq might be used to help prostate cancer patients who have failed all their other options.

In addition to prostate and lung cancer, Exelixis is testing Cometriq in kidney cancer and liver cancer. Data from the latter trial isn't due until 2017, but the kidney cancer trial, dubbed METEOR, is almost completely enrolled and should read out top-line results in the second quarter of next year. If Cometriq can increase progression-free survival compared with Novartis' (NYSE:NVS) Afinitor, the prostate cancer results will be a distant memory.

Exelixis said it should end the year with more than $200 million in cash, which is enough to get the company through next year. Of course, if METEOR comes in positive, shares should increase, which would allow the company to do a secondary offering without diluting shareholders as much as it would raising capital now.