Roche Says Goodbye to PDL

New drugs in clinical trials often fail to make it to the market. The FDA estimates that only 8% of all the drugs entering phase 1 trials make it to approval, and even that's no guarantee of commercial success. This is why it's so important for companies to expedite drugs' passage through clinical trials, so that the successes and failures can reveal themselves as soon as possible -- and consume as few company resources as necessary.

On Tuesday, Motley Fool Rule Breakers pick PDL BioPharma (NASDAQ:PDLI) suffered a setback for its drug candidate daclizumab, revealing that partner Roche was discontinuing its co-development of the drug as a long-term treatment for various organ transplant patients.

Daclizumab is already approved as a treatment for kidney transplant patients, but it's been in testing for numerous other conditions, including asthma and multiple sclerosis. In August, Roche pulled out of a similar collaboration on the drug for asthma; PDL is now shopping the drug around to find a new partner in this indication.

Obviously, having a partner pull out of a collaboration is never a good thing for a drug's prospects, but numerous drug candidates have achieved regulatory approval, even under such circumstances. Without any announcement by Roche, we can only speculate why the relationship was scrapped. The perceived long-run payoff if the drug received approval in this indication apparently wasn't enough to get Roche to stick around.

Having a partner bail is not really PDL management's fault. They don't deserve a ding on their operational abilities for this event -- though they do deserve knocks for the several delays they've experienced with their drugs earlier in the year.

Biopharmaceutical investors have come to expect drug failures. But delays that prevent successful drugs from promptly entering the market can prove downright maddening. Still, for most investors, daclizumab's development in the clinic has been an unexpected bonus, since Wall Street had predominantly been focusing on PDL's nearest-term drug candidate, Nuvion. Therefore, I'd consider Roche's termination of its partnership a minor occurrence at most for PDL.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy .