Biotechs with failed drugs and weak pipelines never die as long as they can get funding from someone via dilutive financings. It's striking how few biotechs actually go out of business; they can almost always find suckers willing to throw good money after bad. Telik (NASDAQ:TELK) isn't at this point yet, but it is almost down for the count because its lead drug candidate, Telcyta, produced negative clinical trial results in three late-stage cancer studies in December.

After these failed studies, Telik's clinical stage pipeline consists of Telcyta, which is still in testing for other cancer indications, and another compound, Telintra, that's in phase 2 trials. Besides these two, the rest of Telik's compounds are in the pre-clinical stage and years away from producing meaningful clinical trial results.

In its year-end financial results announced last week, Telik had $142 million in cash and investments, with guidance for a burn rate of $55 million this year. During the conference call, management said this burn rate is what can be expected after this year, so it won't need another financing through at least 2008. To help stem the declining cash situation, Telik announced a 25% reduction in its workforce earlier this month.

After the company meets with the Food and Drug Administration in the coming months, more results of the failed Telcyta trials will be announced, probably at a scientific meeting like that of the American Society of Clinical Oncology in early June.

I'll admit to rooting extra hard for drug developers based in my backyard of Palo Alto, Calif. But considering all the other development-stage pharmas trading with a similar $200 million enterprise value, but with much more promising pipelines -- or at least a gambler's chance of producing positive late-stage results -- I'd avoid shares of Telik.

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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.