Shares of Massachusetts-based drug manufacturer Verastem Inc. sank by as much as 67.4 percent on Monday following the biotech firm's announcement that its leading lung cancer drug failed to help alleviate patients' symptoms during its clinical trial.

In its official statement, Verastem said that it had discontinued the enrollment of patients diagnosed with a rare form of lung cancer, known as malignant pleural mesothelioma, in its clinical trial. The company said that the advanced study, if successful, was expected to result in a new application for its VS-6063 drug.

Robert Forrester, CEO of Verastem, said that the failure of its experimental drug trial is a severe setback to the company, but it remains committed to developing treatments for cancer stem cells. Despite the disappointment, he said that they are still passionate about their mission to change how cancer is treated.

Forrester added that the company will continue its earlier-stage clinical trials of the VS-6063 drug for other forms of cancer as well as with other drug candidates for cancer.

Verastem's decision to abandon its most advanced clinical trial was received negatively by investors.

After downgrading Verastem's shares recommendation from "buy" to "neutral," research analyst Eric Criscuolo of Mizuho Securities told investors that the disappointing result of Verastem's mesothelioma drug trial is a serious blow to the biotech firm.

Criscuolo said that the focus now has to shift to two pipeline compounds in their early stage, though confidence on Verastem is severely damaged.

Verastem was established in 2010 by Christoph Westphal, who served as a partner at Boston-based venture capital company Longwood Founders Fund, and Robert Weinberg, an MIT biology professor and founding member of the Whitehead Institute for Biomedical Research.

The company's objective was to create combination treatments capable of eliminating tumor-regenerating stem cells that tend to remain even after cancer cells have been reduced by conventional therapies.

In 2012, Verastem became one of the first biotech firms since the 1990s to take its shares public even before any of its medicines entered clinical trials. It did so after the company was able to raise $55 million in its initial public offering.

This started a trend in which over 100 start-up biopharma firms in the United States decided to become public companies in the past three years.