Drug development is a long process usually involving many setbacks and failures, even for the most successful drug makers. For a biotech like Exelixis (NASDAQ:EXEL) with an amazing nine drug candidates in the clinic, it's without question that some of these drugs will fail in the clinic or be unable to show commercial viability. The month of November has exemplified this fact to investors in shares of Exelixis as the development-stage company experienced one-and-a-half setbacks with two drugs in its clinical development program.
The first bit of bad news came when it was announced two weeks ago that its phase 2 program for one of its lead in-house developed drug candidates, XL999, was halting enrollment of new patients for a minimum of several weeks because of a safety monitoring board noticing an elevated level of serious cardiovascular adverse events.
In six phase 2 trials thus far, expected to recruit more than 300 patients, there has been an incidence of adverse cardiovascular events on a scale similar to the XL999 phase 1 trial, which also experienced a roughly 10% incidence of such events. Since most of these adverse events appear to occur early in the drug's dosing, the 115 patients in the trial already taking the drug but not experiencing these adverse events will remain in the trial, and thus the temporary halting of new patient enrollment in the trial will most likely only represent a delay of the trial's finish rather than a failure of the drug.
The other setback for Exelixis came with announcement that its partner for its lead drug, XL119, was discontinuing clinical trials for the drug because of inferiority of XL119 against the drug it was competing with in its pivotal phase 3 trial. Exelixis outlicensed this compound last year to Helsinnn Health care for $4 million, so it did earn something from the compound regardless of the discontinuation of the drug's development. As this was its nearest-term commercial opportunity, this must be considered a failure, albeit a small one. The drug wasn't even developed in-house by Exelixis, so it cannot be a knock on the company's science, either.
Even if the halting of the XL999 phase 2 trials proves to go on longer than anticipated, Exelixis does have three other phase 2 candidates that should start to bring in trial results next year. If I were an investor in shares of the company, I wouldn't be happy about the XL999 trial delay, but neither would I make too big of a deal over this event. I'm sure there will be many more such occurrences for Exelixis along the bumpy path toward drug commercialization.
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Fool contributor Brian Lawler does not own shares of any company mentioned in this article.
