Xenon Pharmaceuticals Inc's shares tumbled 45 percent in premarket trading on Friday after the drug developer said it would discontinue developing its acne drug as it failed to meet the main goal in a mid-stage study.
The drug, XEN801, which was tested against a placebo, did not induce a statistically significant effect in treating moderate to severe facial acne.
The drug also failed to meet secondary endpoints, the company said.
Other companies which are developing acne treatments include Dermira Inc, Novan Inc and Foamix Pharmaceuticals Ltd.
Acne is the most common skin condition in the United States, affecting up to 50 million Americans annually, according to the American Academy of Dermatology.
Xenon, which is testing different drugs for conditions including epilepsy and cardiovascular disease, already has a gene therapy product, Glybera, approved in the European market to treat lipoprotein lipase deficiency (LPLD), a rare cholesterol disorder.
The company is also developing TV-45070, in partnership with Israel-based Teva Pharmaceutical, for the treatment of neuropathic pain, which occurs due to nerve damage.
Xenon's shares were trading at $5.35 premarket. Up to Thursday's close, the company's shares had risen about 50 percent in the last 12 months.
(Reporting by Divya Grover in Bengaluru; Editing by Martina D'Couto)