Argenx shares fell sharply after the biotech company stopped a late-stage clinical trial of its Vyvgart drug due to lack of efficacy for the treatment of autoimmune condition Sjogren's disease.

Shares in Argenx were down 15% in premarket trading on Thursday, wiping out the stock's gains in the year to date. If sustained until close, this would be the stock's biggest one-day percentage drop since December 2023.

The Amsterdam-based company said it would discontinue the study following the recommendation from an independent data-monitoring committee, which concluded that the trial would fall short of its primary goal.

The study evaluated the effects of Vyvgart in subcutaneous formulation in adults with moderate-to-severe Sjogren's disease, a chronic autoimmune disorder that can cause symptoms including dry eyes and mouth, fatigue and joint pain. No new safety signals were identified in the trial, and safety data were consistent with the drug's known profile, Argenx said.

Sjogren's disease is heterogeneous, which makes patient selection in clinical trials particularly challenging, analysts at Bernstein wrote in a note to clients. Novartis achieved positive results with its ianalumab drug candidate last year, but prior to that there had been no meaningful innovation in the disease for more than two decades, they added.

Vyvgart, the first drug Argenx brought to the market, is approved for two conditions that cause muscle weakness, generalized myasthenia gravis and chronic inflammatory demyelinating polyneuropathy, and the company in August said a late-stage study showed it also worked for muscle-wasting disease autoimmune myositis. The drug generated $4.2 billion in revenue for Argenx last year.

The company separately said Thursday that it would move to late-stage development of a celiac-disease drug it acquired as part of its $2.2 billion deal for Forte Biosciences this year, after the medicine showed a clinically relevant treatment effect compared with placebo in a midstage study.