Question

If, after extensive research, the expected observations predicted by a theory fail to materialize, then the theory _____

Answer 1

Should be abandoned or modified

Answer 2

The question is asking us to complete the sentence "If, after extensive research, the expected observations predicted by a theory fail to materialize, then the theory" and the way we can complete it is by saying that the theory is likely wrong - the theory must then be rejected and a new theory should be proposed, one that will lead to a new hypothesis which then should be tested.