Raptor Pharmaceutical Corp lost more than a third of its market value after the company said it did not plan to develop its liver drug, which failed to meet the main goal in a second mid-stage study.
The company’s shares plunged 35.5 percent to $7.61 in premarket trading on Monday.
The study was testing the drug in children with nonalcoholic steatohepatitis (NASH) – a type of liver disease characterized by fat in the liver, along with inflammation and damage.
Patients who took the drug, RP103, did not experience improvement at 52 weeks, the company said.
The study was sponsored by a unit of the National Institute of Health through a research agreement with Raptor.
The drug met its main goal in the first mid-stage study in children with NASH in 2010.
Raptor said it plans to continue further development of RP103 in genetic disorders like Huntington’s and mitochondrial disease.
Shares of the Novato, California-based company had risen 14 percent this year.
(Reporting by Rosmi Shaji in Bengaluru; Editing by Saumyadeb Chakrabarty)