Isis Pharmaceuticals (Nasdaq: ISIS) and co-developer Eli Lilly(NYSE: LLY) announced disappointing phase III results for their antisense cancer drug, Affinitak.

In a study of 616 patients battling non-small cell lung cancer (NSCLC), patients receiving Affinitak along with chemotherapy survived a median 10 months, while patients receiving chemotherapy alone survived 9.7 months, which was considerably longer than the companies expected.

The statistically benign results mean that Affinitak will not be filed for regulatory approval now, as was hoped. However, both companies are committed to further studies because there is reason to remain hopeful.

Survival analysis of 256 patients receiving the full course of treatment showed a median survival time of 17.4 months for those given Affinitak, versus 14.3 months for those receiving chemotherapy alone. Additionally, on multiple secondary endpoints, the group receiving Affinitak fared better.

After full analysis of trial results, several different options could be considered. For example, having displayed relative nontoxicity in this study, Affinitak might be administered in higher doses in a future study.

In 1999, an Isis drug showed disappointing results in a phase III trial for Crohn's disease. Today, that drug (Alicaforsen) is in new phase III trials and industry watchers express hope for it. Affinitak itself is currently in another larger phase III trial being run by Eli Lilly, but results won't be available until probably next year.

Isis has enough cash and cash commitments to last approximately four years at recent burn rates. That's long enough to move many of its 12 other pipeline drugs into advanced trials and, with progress, sign new revenue-generating partnerships. But Affinitak's setback is costly.

It was hoped that Isis would file Affinitak for regulatory approval this summer. In a best-case scenario, that gets moved back to next year, and that assumes positive results from the current Eli Lilly study. Meanwhile, results for Isis' Alicaforsen could be reported late this year.

Isis' stock had already dropped from last autumn's $11 to $4 on Friday, while its short interest rose to a giant 24% of shares available (as of February), making it one of the most heavily shorted stocks on the Nasdaq. It's relatively certain that information about the trial was leaking, and that only adds to today's somber announcement.

Hoping for a better future is the bedrock of humanity, so when something falls short, it stings. But the key is -- as any self-help guru will tell you -- to keep trying. Isis has the resources to do so, but shareholders will need to re-up their patience.

Jeff Fischer has sold puts on Isis, meaning he'll probably own shares soon.