Ever since Gilead Sciences (GILD) grew flush with cash from selling hepatitis C treatments, the company signaled that cancer may be its next big bet. But there are fresh doubts now, thanks to a huge setback with a cancer drug and the departure of a key executive.

Earlier this week, the company halted six clinical trials that were testing its Zydelig cancer medication due to an increased rate of serious side effects, including patient deaths, according to an alert issued by the US Food and Drug Administration.

That followed a move by the European Medicines Agency to review not only the clinical trials, but also existing use of the medicine, which was approved two years ago as a backup treatment for three different blood cancers.

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These developments suggest Zydelig is going nowhere fast. Sales last year were a meager $132 million. And now, the company is no longer going to develop the drug as a first-line treatment for blood cancer. More than that, however, some analysts believe that Gilead’s strategic focus on oncology may be in doubt, despite a handful of cancer drugs in its pipeline.

“The company is doing quite a bit of hand-waving about their strategy in oncology,” said Leerink analyst Geoffrey Porges. “They have continued to suggest that they are refining their strategy based on work they are doing preclinically to develop and identify the best combinations to advance into further development. But it seems to me that it’s moving from the front burner to the back burner with other areas now looking more attractive or accessible. I would certainly be happy with that change in direction.”

There is more, though.

Last month, Gilead lost Philippe Bishop, who led the effort to develop a pipeline of cancer drugs. His departure, which was first reported by TheStreet, came just 14 months after arriving from Genentech, the biotech famous for its cancer meds. At the time, Gilead heralded the hiring.

His exit was reportedly unrelated to the Zydelig setback. Nonetheless, the one-two punch raises questions about the company’s ability to pursue an effective strategy for cancer treatments. A Gilead spokeswoman told us that a replacement for Bishop is being sought, but declined further comment.

“I think it definitely demonstrates that they are not on the cutting edge of oncology right now, but I think they want to be,” said RW Baird analyst Brian Skorney. “If anything, it may cause them to act sooner to try and find something that gets them there.”

Indeed, Gilead had more than $26 billion cash and cash equivalents at the end of last year that could easily allow the drug maker to buy another company or potentially valuable compounds, and eventually make a splash in oncology.

Gilead pursued that strategy when it paid $11 billion four years ago for Pharmasset, which developed the Sovaldi and Harvoni hepatitis C treatments that have fueled its growth over the past two years and helped maintain its status as a Wall Street favorite.

But overall revenue is forecast to be flat this year — at about $30 billion — and the company will have to hunt harder for a good deal, especially after missing out on some opportunities, such as Pharmacyclics, which was purchased by AbbVie (ABBV).

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