Shares of Eiger BioPharmaceuticals Inc. (NASDAQ: EIGR) cratered on Tuesday after the firm announced that its midstage study in pulmonary arterial hypertension (PAH) did not meet its primary endpoint. As a result, the company is discontinuing the development of ubenimex in PAH.

Specifically, Eiger announced Phase 2 Liberty study results. Unfortunately, the study demonstrated no improvement overall or in key subgroups for both the primary efficacy endpoint of pulmonary vascular resistance and the secondary endpoint of six-minute walk distance.

While the company will discontinue ubenimex in PAH, it will continue to develop it for lymphedema. Eiger is developing ubenimex for lymphedema in the ULTRA study, a multicenter, international Phase 2 study in patients with primary and secondary lymphedema with data expected in the second half of 2018.

David Cory, president and CEO, commented:

While we are disappointed with results from the LIBERTY study, we have always recognized that PAH is a complex disease and that this was a translational program. Eiger has a deep pipeline of products focused on rare diseases that was built to reduce risk against a single binary event.  Phase 2 proof of concept has already been demonstrated in both Hepatitis Delta Virus (HDV) Infection and Post-Bariatric Hypoglycemia (PBH).  We look forward to our upcoming End of Phase 2 meeting for HDV with the agency in February 2018.  Topline results from the Phase 2, 28 day PREVENT study in PBH as well as for the Phase 2 ULTRA study in primary and secondary lymphedema will be reported in the second half of 2018.  The company will direct all resources to advance these important efforts.

Analysts took this opportunity to weigh in on Eiger. Wedbush has an Outperform rating with a $34 price target. The firm detailed in its report:

We view the initial sell-off as a buying opportunity in front of multiple potential catalysts in 2018. Due to the early stage of clinical testing for Ubenimex, we did not include Ubenimex for PAH (or for Lymphedema) in our twelve month price target of $34. Our placeholder value per share was only about $2 for PAH. Consequently, the ~$8 drop in valuation is overdone in our view and recommend buying EIGR in front of multiple potential catalysts in the remainder of 2018.

Just been out a week ago, Jefferies was out with a report maintaining its Buy rating and $26 target. The firm noted on January 9 that Eiger was still on track for PAH data in the second half of January. The view at that time was that the safety data for ubenimex supported the high dose for the majority of patients enrolling in extension, and Jefferies was incrementally more positive at that time.

Shares of Eiger BioPharma were last seen down more than 44% at $8.90, with a consensus analyst price target of $32.17 and a 52-week range of $6.10 to $16.20.

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