Over the weekend, Exelixis (NASDAQ:EXEL) presented clinical trial data from two of its top cancer-fighting compounds at the very busy American Society of Clinical Oncology (ASCO) medical conference.

The first compound to get profiled was XL880 and its 45-person phase 1 study. Phase 1 studies are usually too soon to get a detailed picture of a drug's benefits and risks, as we learned with Exelixis' XL999 last year. But the good news is that XL880 showed clinical activity in fighting cancer with more than half of all patients on the drug experiencing prolonged stable disease or tumor shrinkage.

XL880 showed particular activity against a form of kidney cancer, with three of the patients in the study with this disease experiencing greater than 30% shrinkage of their tumors. The drug is currently in phase 2 trial testing.

The other compound that Exelixis highlighted at ASCO is XL999. Last year, this compound was Exelixis' furthest along in testing, until it hit a snag with the high number of cardiovascular adverse events in a phase 2 study.

After halting the trial, Exelixis decided to send XL999 back into phase 1 testing in non-small cell lung cancer since the drug did show activity for this cancer patient population; that trial is set to begin later this year. But after the cardiovascular issues seen in the phase 2 study, Exelixis will have trouble getting the compound approved with anything less than a restrictive label. Since non-small cell lung cancer is one of the tougher cancers to treat and has relatively few treatment options besides chemotherapy and OSI Pharamaceuticals' (NASDAQ:OSIP) Tarceva, there will still be a market opportunity for XL999 in this indication due to its differentiated mechanism of action.

The small molecule cancer-targeted therapy space is becoming increasingly crowded, so it's important that Exelixis continues to expedite its drug pipeline. There's a lot to like about Exelixis, but there could still be near-term bumps along the way if partner GlaxoSmithKline (NYSE:GSK) decides to not exercise its option to continue development of Exelixis' XL647 later this year. Even if the GSK decision doesn't go Exelixis' way, long-term investors won't be feeling too much pain if the company continues to announce positive clinical trial results like it did at ASCO.

Exelixis is a Rule Breakers selection, and GlaxoSmithKline is an Income Investor recommendation. You can learn more by taking either -- or both! -- newsletter for a free 30-day trial.

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