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It's always disappointing when drugmakers' best efforts fall short and, unfortunately, it happens far too often. Historically, 90% of drugs entering human clinical trials end up in the laboratory dustbin rather than on pharmacy shelves, so while disappointing, it's probably not too surprising that these high-profile medicines flopped in 2016.

No. 1: Marijuana can't conquer cancer pain
Sadly, patients with cancer continue to suffer from significant pain and efforts by GW Pharmaceuticals (NASDAQ:GWPH) and its partner Otsuka to scientifically prove marijuana can help many of these patients fell flat in 2016.

The two companies were evaluating GW Pharmaceuticals' Sativex, a formulation of the marijuana cannabinoid THC, but despite mid-stage study results that were encouraging, GW Pharmaceuticals reported in January that the first of three trials evaluating Sativex in cancer pain failed to perform better than placebo and those findings were confirmed in October when GW Pharmaceuticals reported that the remaining two studies also failed.

Sativex's failure means that cancer pain patients are left with few FDA-approved pain relief options besides opiates, which fail to manage pain adequately for up to 40% of cancer pain patients. The disappointment is also a blow to the pro-medical marijuana movement because it has long been thought that marijuana offers relief to these patients and to GW Pharmaceuticals investors who had been hoping that an approval would lead to significant sales in a market worth billions of dollars annually.

No. 2: A high-cholesterol treatment trips on its way to the finish line
Despite statins being widely used in tens of millions of patients to lower bad cholesterol levels, more than 600,000 Americans still die from heart disease every year and that's got big pharmaceutical companies, such as Eli Lilly (NYSE:LLY), plowing hundreds of millions of dollars into the development of next-generation cholesterol busters that work differently than statins, which lower cholesterol production in the liver.

Unfortunately, Eli Lilly reported in October that evacetrapib, a drug that stops a protein known as CETP, which lowers good cholesterol levels and increases bad cholesterol levels, doesn't work.

Eli Lilly hoped that evacetrapib could become widely used alongside statins to keep cholesterol from forming the plaques in arteries that result in heart attack and stroke, but when independent monitors looked at the data this past fall, they determined it was very unlikely that evacetrapib would achieve clinical endpoints necessary to win FDA approval, leading Eli Lilly to abandon any further development of the drug.

Although evacetrapib's failure means doctors have one less weapon in the fight against heart disease, Eli Lilly competitors Amgen and Regeneron won approval of PCSK9 inhibitors this past summer. Those drugs, which boost bad cholesterol receptors in the liver, are already being prescribed in some tough-to-treat patients and now that they won't have to compete against evacetrapib, it appears Eli Lilly's loss is their gain.

No. 3: Doubts emerge for NASH treatment
Nonalcoholic steatohepatitis (NASH) is a fast-growing cause of liver failure that is estimated to occur in 5% of patients and it could become the leading cause of liver transplant by 2020. In a bid to keep that from happening, Intercept Pharmaceuticals (NASDAQ:ICPT) is developing obeticholic acid.

Last year, positive mid-stage findings resulted in Intercept Pharmaceuticals kicking off a phase 3 study in the U.S. with a scheduled interim look in 2017, but enthusiasm for NASH therapy has faded since competitor Genfit reported in March that its NASH drug failed in phase 2 studies and Intercept Pharmaceuticals reported in October that a phase 2 study of obeticholic acid in Japan failed to improve patient's liver disease by two points on a standard liver disease measure.

Because these trial failures raise concern that obeticholic acid may not be as effective as previously thought, shares in Intercept Pharmaceuticals have fallen to less than $150 from a peak of $480 earlier this year.

That's a lot of pain for investors to endure, but it's not all bleak for Intercept Pharmaceuticals. The company has already filed for approval of obeticholic acid in another much rarer form of liver disease and a decision from the FDA in that indication is expected in February. Additionally, there's still a chance that obeticholic acid posts better results in the larger ongoing U.S. phase 3 study than it did in this smaller Japanese phase 2 trial.

Tying it together
The sheer number of trial failures makes drugmakers some of the riskiest stocks to buy. Risk of trial failure can be lowered by diversifying across stocks and focusing on drugmakers with late-stage clinical trials underway, but since two of these failures occurred in phase 3 studies, there's no guarantee or magic formula for success.

Investors must be willing to accept the risk that is inherent in this industry if they want to benefit from potential rewards associated with successful, game-changing medicines.

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 has no position in any of the stocks mentioned. 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.