Shares of Xoma (XOMA) are trading down 77% at Wednesday's close after reporting failed results of its phase 3 trial in patients with Behcet's disease Uveitis — a rare eye disease. The phase 3 trial is known as the EYEGUARD-B trial run by a French Pharmaceutical company known as Servier. Patients in the study were given Xoma's drug, gevokizumab, which attempted to reduce inflammation associated with the disease. 

The trial did not achieve the primary endpoint of the study, but the company stated that it saw some other exploratory improvements such as: Preserved visual acuity, less severe ocular exacerbations, and reduced reports of macular edema. Now Xoma will confer with Servier on full detailed analytical reports to determine the next course of action for this drug against this disease. 

Xoma claims now that it does have some other promising programs that have already shown good results in phase 1 clinical trials. Such drugs are Xoma 358, which regulates insulin production in patients who produce too much insulin in their bodies. XOMA 089 is a monoclonal antibody that may have potential in immuno-oncology indications and other fibrotic diseases.

The problem  is that these programs are early in nature and will take many years to reach phase 3 even if the clinical trials prove to be successful. For now Investors should avoid Xoma at all costs as it will drift lower in the coming days.