Biotech firm

Pharmacyclics

(PCYC)

said late Thursday that its experimental cancer drug, Xcytrin, has failed to meet the goals of its late-stage tests.

Critics and supporters of the company have been fighting a two-year

battle of Xyctrin, with Pharmacyclics bulls believing the drug is a potential blockbuster, while bears insisting it's nothing but junk science.

Thursday, the bears ate steak.

Xcytrin is designed to improve the effect of radiation therapy used to help cancer patients. Simply put, the drug collects exclusively in tumor cells, disrupting their function and making them more sensitive to the lethal radiation. Pharmacyclics tested Xyctrin in patients dying from cancer that had metastized, or spread, to their brain.

But Thursday, the company said median survival for patients using Xcytrin plus radiation was 5.2 months, compared to 4.9 months for patients on radiation alone -- an inadequate improvement to meet the trial's goal.

In after-hours trading, Pharmacyclics was one of the most active on Instinet, losing $11.50 or 53%.

The company was also hoping to show that patients using Xcytrin would have an improved quality of life due to the shrinking of their brain tumors. But again, while Xcytrin patients showed some improvements, they were not statistically significant.

Hoping to spin something positive from defeat, Pharmacyclics executives said that a more detailed analysis of the trial's results suggests that some types of cancer patients, such as those with lung cancer, may have actually benefited from Xcytrin enough to meet the statistical goals of the study.

The company said it plans to discuss these results with the Food and Drug Administration to see whether an approval application for Xcytrin could still be filed. Typically, such a strategy is a long shot, however.

Pharmacyclics is also still testing Xcytrin in other forms of brain cancers.The company announced the Xcytrin results just prior to the 4 p.m. EST market close. Shares of the company closed down $1.33, or 5.7%, to $21.70 per share.