Small companies like Northfield Laboratories (NASDAQ:NFLD) depend on the success of their drugs in clinical trials. The unimpressive results it announced for its blood substitute, PolyHeme, last week might make Northfield look like another drug developer with an intriguing but problematic product.

In a large, 700-person phase 3 trial, PolyHeme failed to demonstrate that it was superior or not inferior to the control group after an infusion and then followup for 30 days, but it did prove to be not inferior in a subgroup analysis of the data that excluded improperly treated patients in the study.

So what are the chances that the Food and Drug Administration will approve PolyHeme for marketing based on the results? Looking at this preliminary data, my bet is that Northfield will at best get an approvable letter, but I highly doubt it will receive even that, considering the drug didn't even show it was not inferior and failed to extend patients' survival in any of the treatment subgroups compared with the control group.

Also remember that the FDA pulled Elan's (NYSE:ELN) therapeutic multiple sclerosis treatment off the market over two questionable deaths, and hasn't approved Encysive's (NASDAQ:ENCY) Thelin, even though it has proved to be much safer than some existing treatments for pulmonary arterial hypertension, or high blood pressure. And I won't even go into the Vioxx mess and how the FDA barely voted to allow it back onto the market despite its proven effectiveness. The FDA has been conservative in the past several years, so it would be quite a dramatic shift for PolyHeme to gain approval on the mixed data from this trial.

Lest investors think that Northfield shares have nowhere to go but up, right now the share price is being supported by the $58 million in cash and marketable securities on the company's balance sheet, plus the hopes that something positive will pop up when Northfield releases more of the study's data. Considering that Northfield burned through $15 million in the most recent quarter, its current stash won't last long.

Barring some new dramatically positive safety data showing up, PolyHeme's future remains in doubt because it will be hard for Northfield to get another clinical trial like this approved in the U.S. Investors might be better off cutting their losses rather than sticking around for possible bad news from the FDA as soon as late 2007 or early 2008.

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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 .