Dermira Inc. had high hopes for a new acne treatment it was developing after positive results from two phase 2 trials.
But on Monday, the company stunned Wall Street by announcing that it is abandoning development for the drug, called olumacostat glasaretil, after results from a new study indicated that the treatment showed no improvement in moderate to severe acne.
The market for acne is estimated to be worth $3.3 billion and several companies, including Novan Inc. and Foamix Inc., are in the hunt for new treatments.
Shares for Dermira tanked by about 63 percent on Monday following the announcement.
Read the full Reuters report.