What's Happening: Shares in Exelixis (NASDAQ:EXEL) slumped by 10% earlier today and closed 7% down after the company reported that the FDA is delaying a decision regarding approval of its cobimetinib, a therapy for BRAF V600 mutation-positive advanced melanoma.

Why it's happening: The FDA was expected to weigh in with a decision on whether or not to approve cobimentib in August, but the agency's new timeline means that investors won't know its decision until November 11.

The delay is reportedly in order to provide a reasonable amount of time to review additional information from Exelixis' CoBRIM trial, as requested by the regulator. The CoBRIM trial evaluated cobimetinib and Zelboraf as a co-therapy alternative to Zelboraf monotherapy.

Exelixis developed cobimetinib internally; however, it licensed cobimetinib to Roche's Genentech, the maker of Zelboraf, in 2006.

Since cobimetinib is out-licensed, Exelixis won't reap the full benefit -- or endure the full pain -- of an FDA go or no go decision. However, investors are eager for Exelixis to deliver a win following the failure of its once-promising Cometriq in a late stage prostate cancer trial.

If the FDA review of this additional information goes smoothly and an approval is granted, Exelixis will split profits and losses associated with the marketing of cobimetinib in America on a sliding scale. If approved outside the U.S., then Exelixis will receive royalties on any cobimetinib sales. 

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends Exelixis. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.