Dear A husband, Neoadjuvant therapy refers to a chemotherapy plan in which chemotherapy is given prior to surgery to shrink the tumor to hopefully decrease the amount of tissue needed to be taken in the surgery. It is another way of approaching the breast cancer especially with large tumors to shrink them so that breast conservation surgery can be done. It is not unusual that cancer cells are found after only 2 cycles of neoadjuvant therapy, this in itself does not change the prognosis. From the pathology report they would be able to tell if they were able to remove all cancer in the lumpectomy specimen. Radiation therapy then would treat the rest of the breast tissue, in case there was microscopic disease in the breast. Radiation therapy is usually done after further chemotherapy (adjuvant chemotherapy or the rest of the neoadjuvant therapy plan).
I take it the original tumor was quite large, and it was elected to shrink it before operation. Such treatment isn't really expected completely to eradicate all cells: if it were, there'd be no reason for any more treatment. If it shrank, that's good. It's sort of a matter of degree. Radiation is quite effective at eliminating residual cells in the breast. Chemo works best on microscopic amounts of cells; namely any that might have gotten out of the breast area. So what you describe doesn't speak of treatment failure at all, at this point in her therapy.