SOUTH SAN FRANCISCO (TheStreet) -- The Exelixis (EXEL) - Get Exelixis, Inc. Report cancer drug cabozantinib failed to prolong survival in men with advanced prostate cancer, according to results from a phase III study announced Monday night. 

Due to the negative outcome of the cabozantinib prostate cancer study, Exelixis will fire 70% of its workforce, or 160 employees, the company said. Following the downsizing, Exelixis will employ 70 people and focus on two, ongoing phase III studies of cabozantinib in kidney cancer and liver cancer. Cabozantinib is already approved for the treatment of a relatively rare form of thyroid cancer and is sold under the brand name Cometriq. Reported sales are de minimis

At Friday's close of $4.14, Exelixis shares were already down 33% for the year because investors were mostly skeptical about cabozantinib's chances to succeed in prostate cancer following an inconclusive interim analysis conducted last March. Still, expect the stock to fall further Tuesday. At the open, Exelixis shares were off 53% to $1.91.

The so-called COMET-1 study enrolled 960 men with advanced prostate cancer no longer responding to treatment with the chemotherapy drug docetaxel, Johnson & Johnson's (JNJ) - Get Johnson & Johnson (JNJ) Report Zytiga and/or Medivation's (MDVN) Xtandi. The patients were randomized to treatment with cabozantinib or the steroid prednisone and followed for survival. As reported Monday, cabozantinib reduced the risk of death by 10% compared to prednisone but the difference was not statistically significant. The study failed to achieve its primary endpoint. 

At the median, patients treated with cabozantinib lived 11 months versus 9.8 months for the prednisone-treated patients. Again, the survival trend favoring cabozantinib was not statistically significant. 

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Enrollment in a second, phase III study of cabozantinib in prostate cancer -- designed to measure pain relief -- has been halted based on the negative outcome from the first study, Exelixis said. 

The ongoing phase III study of cabozantinib in kidney cancer is expected to report results in 2015. The liver cancer study will complete in 2017, Exelixis said.

Exelixis also shares economic rights to the experimental cancer drug cobimetinib, which is being developed by Roche (RHHBY) . In July, Roche announced plans to seek approval for cobimetinib in melanoma based on positive results from a phase III study.

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