Last year wasn't good for small-molecule drug developers like Array BioPharma (Nasdaq: ARRY). Earlier this week, Rule Breakers pick Array released its 2007 year-end financial results, giving guidance for what looks like another busy year.

Array's big news last year was the underwhelming results of its lead drug, potential MEK inhibitor and oncology compound ARRY-886, in a phase 2 trial run by partner AstraZeneca (NYSE: AZN). The drug is not dead in the water yet; there are many other clinical trials under way for it in various cancer indications. Obviously, though, its lack of superior efficacy in its lead cancer studies portends poorly for the drug's future.

Besides ARRY-886, Array will advance the six in-house drugs in its pipeline in 2008. Phase 2 results are due within the next six months for several of those candidates, including inflammation and pain treatment drug ARRY-797. Array's hepatitis C protease inhibitor, out-licensed with InterMune (Nasdaq: ITMN), will finally produce its first efficacy clinical trial data soon.

Array started 2008 with $142 million in cash and equivalents on its balance sheet, which should be enough to get it through the year without needing to raise more funds. That's important, considering how depressed its share price is at present. Trying to raise cash now would significantly dilute current shareholders.

Recent months haven't been kind to investors in the small-molecule drug-discovery business. All of the specialized drug-discovery powerhouses without drugs on the market are trading at or near 52-week lows right now, including Exelixis (Nasdaq: EXEL) and Pharmacopeia (Nasdaq: PCOP). Aside from Array, these shares' weakness doesn't owe to any particular clinical-trial failures, either. With development-stage pharmas currently out of favor, investors seem to be demanding proof of these companies' performance before they'll bid the shares back up again.

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