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Photo: SFC Image 1 of / 5 Caption Close Image 2 of 5 In this file photo, a tray of pipettes used to deliver various solutions and compounds is loaded into one of the high tech devices Exelixis uses to discover new drugs. In this file photo, a tray of pipettes used to deliver various solutions and compounds is loaded into one of the high tech devices Exelixis uses to discover new drugs. Photo: The Chronicle Image 3 of 5 In this file photo, Senior scientist Jia Li examines a crystal of a protein with disease at Exelixis. Exelixis of South San Francisco is part of a second wave of drug developers in the search for better cancer drugs. The race is on to create next-generation drugs that come closer to defeating cancer. less In this file photo, Senior scientist Jia Li examines a crystal of a protein with disease at Exelixis. Exelixis of South San Francisco is part of a second wave of drug developers in the search for better ... more Photo: SAN FRANCISCO CHRONICLE Image 4 of 5 In this file photo, a tray of samples is given to a robot that will run hundreds of tests on the material at Exelixis. In this file photo, a tray of samples is given to a robot that will run hundreds of tests on the material at Exelixis. Photo: SAN FRANCISCO CHRONICLE Image 5 of 5 Exelixis to lay off 70 percent of staff after prostate cancer drug bombs 1 / 5 Back to Gallery

Exelixis is watching its stock plummet after its experimental drug failed to prolong the lives of men with advanced prostate cancer in an important, late-stage clinical trial.

Announcing those bombshell results late Monday, the South San Francisco biotechnology company said it will lay off 70 percent of its workforce, or about 160 employees, and halt other prostate cancer studies. Its remaining 70 employees will focus on two, ongoing phase III studies of the drug, cabozantinib, in advanced liver cancer and kidney cancer.

Early Tuesday, Exelixis’ stock sank by about half to about $1.95 a share.

Cabozantinib is already approved to treat progressive, advanced medullary thyroid cancer. But that disease accounts for just 3 to 4 percent of all thyroid cancers. Exelixis was betting that cabozantinib would also work in prostate cancer, a much bigger market.

In particular, cabozantinib was being evaluated in a randomized, double-blind phase III trial in 960 men with metastatic castration-resistant prostate cancer who failed to respond to the chemotherapy drug docetaxel, as well as two other drugs for the condition, Johnson & Johnson’s Zytiga and/or Astellas’ and Medivation’s Xtandi. At the median, patients treated with Exelixis’ drug lived 11 months versus 9.8 months for patients treated with the control, the steroid prednisone — but that difference was not statistically significant, the company said.

President and CEO Michael Morrissey said Exelixis was “very disappointed” in the results. In a conference call with investors Tuesday, company officials indicated they did not know why cabozantinib failed to work as hoped, but said they still had confidence in its potential for its other trials in liver and kidney cancer.

The company said it will stop enrolling patients in a second trial of cabozantinib in prostate cancer, one designed to see if the drug relieved pain in patients. It will also halt a randomized phase II study of cabozantinib in combination with Zytiga.

Back in late 2008, Bristol-Myers Squibb paid Exelixis $195 million to develop the drug that later became known as cabozantinib and a second experimental drug. But in 2010, Bristol-Myers Squibb bailed on cabozantinib and then-CEO George Scangos soon after left to run Biogen Idec in Massachusetts.

In a partnership with Roche, Exelixis is also developing another compound, cobimetinib, for previously untreated patients with a genetically mutated form of advanced skin cancer. Based on positive results, Roche said in July it intends to seek FDA approval for the melanoma drug.

Update, 9/8, 10:40 a.m.: This post has been updated to add Astellas as the co-marketer and co-manufacturer of Xtandi, along with Medivation.