Trubion reported mid stage trial results after the markets closed on Monday and said a single, intravenous dose of the drug was more effective than a placebo in treating arthritis symptoms. But Trubion also said its development strategy for TRU-015 will likely include another study before it moves to late-stage testing.

Shares fell $5.31, or 27.8 percent, to $13.76.

Lazard Capital Markets analyst Joel Sendek in a client note Tuesday downgraded shares to "Hold" from "Buy" on the news. He said the company will now have little to report over the next year.

Sendek said that few patients in the test group saw dramatic improvement in their symptoms. Four percent of the patients who received the larger dose of TRU-015 reported a 70 percent reduction in swollen or tender joints, compared with 2 percent of patients taking a placebo. None of the patients who took the smaller dose felt that much improvement.

"In light of the encouraging Phase IIa data, the Phase IIb is disappointing," Sendek said.

Morgan Stanley analyst Steven Harr said the delay could end up being a good move, as more test data could show that the TRU-015 is more effective or has longer-lasting effects than Biogen Idec Inc.'s Rituxan.

He held an "Overweight" rating on the Seattle company's shares.

"Trubion is not disclosing the reasons for additional studies, but we expect the companies will explore additional dosing frequencies to optimize efficacy, for while preliminary data looked more or less in line with Rituxan, full Phase II data may show best-in-class potential with more frequent dosing," Harr said.

Shares of Wyeth, which is developing the drug with Trubion, dipped 14 cents to $46.16.