Antisoma suffered a blow last night after it revealed that a key acute leukaemia drug had failed in a final-stage clinical trial.
The biotech firm said it had also halted the development of another cancer treatment after early data from an ongoing penultimate-stage trial showed that the result was likely to be inconclusive.
The news triggered a sharp sell-off in Antisoma's shares, which closed at 2.2p, down more than 64 per cent. The decline leaves the firm valued at around £14m.
Glyn Edwards, Antisoma's chief executive, said the company had not seen a benefit with the AS1413 leukaemia treatment. "This is hugely disappointing for patients, investigators, investors and employees" he said. "We will now become smaller and focus on maximising the value of our other programmes."
Paul Cuddon at the Peel Hunt brokerage said the developments meant that "other than a £23m cash balance, which is continuing to decline, there are few assets left to value in the Antisoma pipeline".
He warned: "Other than 3.5p of cash, which we anticipate will fall to 2p, little value remains in Antisoma, and sadly we fail to see an ongoing future."
Samir Devani at Nomura Code Securities said the failure of the AS1413 final-stage trial was "not a huge surprise" as he had only assumed a 30 per cent chance of success.
The setback did, however, have a "major impact" on Antisoma's valuation, he added.
"We expect the company to go into cash-conserving mode and anticipate a significant restructuring in the near-term," he explained.
The latest setback comes less than a year after Antisoma's key lung cancer drug, ASA404, failed in March.