On Wednesday, Array BioPharma (NASDAQ:ARRY) announced top-line results from three phase 2 studies of its intriguing lead drug, and apparently the market didn't like those results, as shares were down more than 27% on the news.

The ARRY-886 compound is interesting -- Array BioPharma is developing it under a partnership deal signed in 2003 with AstraZeneca (NYSE:AZN) -- because there are no approved cancer drugs that fight the MEK protein, a cancer cell growth target. The top-line results were from three trials testing the drug in late-stage melanoma, non-small cell lung cancer, and colorectal cancer patients.

The melanoma study was by far the biggest of the trials, with a target enrollment of 182 patients; the lung and colorectal cancer trials were more exploratory 80- and 60-odd patient trials. The short version of the results is that ARRY-886 was not more effective than the control group in any of these studies and likely won't be tested further as a monotherapy for these cancers.

The good news is that ARRY-886 did exhibit anti-tumor activity in melanoma and lung cancer patients, so Array BioPharma could continue to test it as a combination therapy, the way many other cancer drugs are used. It's a viable option, although it likely would need more phase 2 testing to do that.

Array BioPharma expects AstraZeneca to reveal the data from these studies sometime in the middle of 2008 (probably at the American Society of Clinical Oncology conference). Until that data is announced, it's too early to hypothesize what the results mean for ARRY-886's future or for other drugmakers with MEK inhibitors, like Exelixis (NASDAQ:EXEL) with its phase 1 candidate, and Pfizer (NYSE:PFE).

These ambiguous clinical trial results don't mean that ARRY-886 is toast yet, or that Array BioPharma is done with MEK inhibitors. The company also has another MEK inhibitor in testing for inflammatory diseases and has a second-generation MEK inhibitor that it wants to use to fight solid tumors in phase 1 testing as well.

Just like with fellow Rule Breakers pick Exelixis, not all of Array BioPharma's compounds are going to be success stories, and it's the breadth and lack of reliance on any one pipeline candidate that makes Array an interesting investment. The latest results can be considered a setback for Array BioPharma (perhaps AstraZeneca should have tested the drug in combination therapy to begin with), but it's far from finished.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Pfizer is an Inside Value pick. The Fool has an A+ disclosure policy.