London: Arrowhead Therapeutics said on Monday it was canceling late-stage development of its lead experimental drug to treat a rare lung disease after it failed to hit key targets in a mid-stage study, sending its shares tumbling more than 90 per cent.

The only product from the drug developer, called AV-101did not help to fix blood flow from the lungs to the heart in patients high blood pressure from obstruction of the arteries of the lungs (PAH), compared to placebo at all three tested doses.

PAH is caused by narrowing of the arteries in the lungs, resulting in high blood pressure and symptoms such as difficulty breathing, chest pain, and dizziness.

It affects about 40,000 people in the United States. PAH causes the heart to work harder to pump blood and can lead to problems such as: Heart failure,

Current treatment options include Merck’s Winrevare, recently approved by the US Food and Drug Administration.

Treatment with AV-101 did not lead to a meaningful improvement in patients’ ability to walk for six minutes, which was a secondary goal of the study. Arrowhead said the drug also failed several other secondary goals.

AV-101, a dry powder formulation, is administered directly into the lungs of patients. It is designed to stop disease-causing cells from growing rapidly.

Based on the data, the Massachusetts-based company said it was pausing enrollment for the drug and discontinuing late-stage and long-term extension studies.

Arrowhead said detailed data from a mid-stage study will be released later.“Clearly, this is a worst-case scenario for Arrowhead shares,” said Wedbush analyst Laura Chico, adding that shares could trade at cash levels as management considers its next steps.

Arrowhead said it had cash and equivalent assets of about $100 million as of June 15. Shares hit a record low of $2.18 in early trading on Monday.

(Reporting by Pratik Jain in Bengaluru; Editing by Krishna Chandra Eluri)