Achillion Pharmaceuticals Inc. (NASDAQ: ACHN) saw its shares slump early on Monday after the firm announced that its hepatitis C license and collaboration agreement with Janssen had been terminated. The termination notice follows the decision by Janssen to discontinue the development of the investigational hepatitis C treatment regimen JNJ-4178, a combination of three direct acting antivirals: AL-335, odalasvir and simeprevir.

Keep in mind that Janssen is a subsidiary of Johnson & Johnson (NYSE: JNJ).

In August 2017, Achillion announced positive interim data from a Phase 2 trial with ACH-4471 for patients with untreated paroxysmal nocturnal hemoglobinuria (PNH). In addition to its plans to continue this study of untreated PNH patients, Achillion anticipates initiating a second Phase 2 study in PNH patients who suboptimally respond to treatment with eculizamab, the current standard of care.

Also during the second half of 2017, Achillion anticipates initiating patient dosing in two Phase 2 trials of ACH-4471.

Milind Deshpande, Ph.D., president and CEO of Achillion, commented:

We are disappointed by Janssen’s decision to discontinue HCV development given the positive data presented in phase 2a with JNJ-41781, demonstrating a 100% cure rate after only six weeks of therapy. While we believe that patients worldwide would benefit from convenient, short-duration therapies like JNJ-4178, we remain fully focused on advancing our factor D portfolio of complement alternative pathway inhibitors in areas where patient needs are greatest, and using our strong balance sheet of almost $370 million in cash and cash equivalents at June 30, 2017 to do so.

Shares of Achillion closed Friday at $4.91, with a consensus analyst price target of $7.14 and a 52-week trading range of $3.15 to $9.19. Following the announcement, the stock was down about 27% at $3.60 in early trading indications Monday.

Shares of Johnson & Johnson closed most recently at $130.98. The 52-week range is $109.32 to $137.08, and the consensus price target is $136.89.

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