When a drug trial goes bad, the hit to a drug maker’s stock is instant and spectacular. Wednesday it will be Insmed Inc. (NASDAQ: INSM) in the spotlight.

The company reported Wednesday morning that its treatment for nontuberculous mycobacterial (NTM) lung infections did not meet its pre-specified level for statistical significance in a randomized, double-blind, placebo-controlled Phase II clinical trial. A secondary endpoint did achieve a statistically significant result, with 11 of 44 patients demonstrating negative cultures by the end of the study, compared with just three of 45 in the placebo group.

The trial was conducted for Arikayce, Insmed’s inhaled treatment for patients with NTM. The goal of the primary endpoint was to show a reduction in the density of bacteria of at least one step along a seven-point scale as a means of identifying whether a trend suggestive of ultimate culture conversion could be established. The number of patients showing at least a one-step reduction in the treatment arm versus those in the placebo arm was not statistically significant (p=0.148).

The company plans continued discussions with U.S. and EU regulators to determine the next steps for the treatment.

Insmed shares were down nearly 25% in premarket trading Wednesday, at $13.85 after closing at $18.30 on Tuesday. The stock’s 52-week range is $6.56 to $22.29.

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