Merrimack Pharmaceuticals Inc said it would stop a study testing its drug in advanced breast cancer patients, after an analysis suggested the drug would unlikely show superiority over chemotherapy.
Merrimack's shares slumped 21.79 percent to $4.20 in premarket trading on Wednesday.
Both sets of patients - on Merrimack's drug and on chemotherapy - experienced a smaller-than-expected impact in terms of slowing their disease progression.
Continuing the mid-stage study would unlikely show the drug's benefit over chemotherapy, an independent data and safety monitoring board recommended.
A subsequent futility analysis confirmed the recommendation, Merrimack said.
The trial comprised women with a difficult-to-treat form of cancer called HER2-positive metastatic breast cancer, in patients whose cancer worsened despite treatment.
Up to Tuesday's close, the company's stock had fallen 32.03 percent since the start of the year.
(Reporting by Akankshita Mukhopadhyay in Bengaluru; Editing by Martina D'Couto)