Nivalis Therapeutics Inc (NASDAQ:NVLS) shares are collapsing nearly 60% after the biotech firm’s cavosonstat’s Phase II proof-of-concept trial in F508del homozygous cystic fibrosis patients failed to demonstrate any benefits in either lung function or sweat chloride, which are two established measures of activity.

In reaction to the heavy setback, considering that oral GSNOR inhibitor cavosonstat is the firm’s “primary asset” and “sole clinical candidate,” Cowen analyst Phil Nadeau downgrades NVLS from an Outperform rating to a Market Perform rating on shares of NVLS without suggesting a price target.

The analyst notes, “Unfortunately the trial failed to produce signs of clinically significant activity. The primary endpoint of the trial was within group absolute change in ppFEV1 (a measure of lung function) from baseline to week 12. On this endpoint cavosonstat plus Orkambi failed to demonstrate improvements relative to Orkambi alone. In fact, the absolute change in ppFEV1 trended against cavosonstat (0.39 for 200mg BID cavosonstat and 0.35 for 400mg cavosonstat vs. 0.97 for placebo).”

Presently, “With the available data suggesting cavosonstat is not sufficiently potent, its path forward is unclear,” urging the analyst to head to the sidelines on the biotech firm in wake of this key failure.

Ultimately, “The magnitude of improvement is small and the clinical significance of the benefit is questionable. Therefore the data present no clear path to registration,” Nadeau concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Phil Nadeau is ranked #1,423 out of 4,239 analysts. Nadeau has a 48% success rate and gains 1.8% in his yearly returns. When recommending NVLS, Nadeau earns 13.3% in average profits on the stock.

TipRanks analytics exhibit NVLS as a Hold. Based on 5 analysts polled in the last 3 months, 1 rates a Buy on NVLS, while 4 maintain a Hold. The 12-month average price target stands at $4.63, marking an 84% upside from where the shares last closed.