Last week, Sonus Pharmaceuticals (Nasdaq: SNUS) reported a first-quarter loss of $3.2 million, with $5.1 million in revenue. Sonus ended the quarter with just less than $50 million in cash and investments, giving it adequate liquidity through at least mid-2008. However, investors won't have to wait that long for a major catalyst. During the third quarter, results are expected from the phase 3 clinical trial for the company's lead cancer drug candidate, Tocosol Paclitaxel.

The company's unique Tocosol formulation is an emulsion derived from vitamin E, designed to reduce side effects and improve the solubility of the cancer drug paclitaxel. This shortens the intravenous infusion time from three hours to 15 minutes, which keeps cancer patients from having to sit in the doctor's office all afternoon.

Phase 2b data for the Tocosol formulation of paclitaxel showed a lower incidence of neuropathy (manifested as numbness and tingling) compared with Abraxane and Taxol. Abraxane is an albumin-based formulation of paclitaxel made by Abraxis BioScience (Nasdaq: ABBI); it was also designed to improve the solubility and reduce the side effects of the original Taxol, from Bristol-Myers Squibb (NYSE: BMY).

Sonus Pharmaceuticals' phase 3 trial examines Tocosol to treat metastatic breast cancer, but the compound has shown promise in phase 2 studies for other solid tumors such as non-small-cell lung cancer, ovarian cancer, and metastatic bladder cancer -- providing additional market potential beyond the initial indication for metastatic breast cancer. I expect Tocosol will demonstrate that it's at least as effective as Taxol, with a lower incidence of side effects, resulting in Food and Drug Administration approval some time during the second half of 2008.

For more Foolish biotech coverage, check out the market-beating Rule Breakers newsletter service, which finds innovators of all stripes and types. See all our recommendations and get access to message boards and exclusive content with a 30-day free trial.

Learn from the collective stock-rating wisdom of Foolish investors and see my picks and pans at the free Motley Fool CAPS community home page.

Fool contributor Mike Havrilla, R.Ph., B.S., Pharm.D., is a Rite Aid pharmacist who lives, writes, works, and enjoys running on the streets and trails in the small Pennsylvania town of Portage. He invites your comments and feedback. Mike does not have a position in any company mentioned in this article. The Fool has a disclosure policy.