Roche’s Genentech is handing back rights to NewLink Genetic’s investigational immunotherapy navoximod, pushing the latter’s stock down more than 30 percent.

Genentech picked up rights to the IDO inhibitor - designed to harness multiple components of the immune system to combat cancer - back in October 2014 amid a collaboration on solid tumour therapies at one time thought to be worth more than $1.1 billion to NewLink.

Now, NewLink will pay Genentech a low single-digit royalty on any sales of GDC-0919 should it decide to develop and commercialise the drug, while Genentech will supply the drug for one year after the deal’s termination.

"We are obviously disappointed in this decision," said NewLink’s chief executive Charles J. Link. "We remain committed to advancing our IDO pathway inhibitor indoximod, which continues to generate exciting data in combination with anti-PD-1 agents, cancer vaccines, and chemotherapy in multiple cancer types including melanoma, prostate cancer, acute myeloid leukaemia, and pancreatic cancer."

However, just days ago the firm published data showing that indoximod in combination with taxane chemotherapy failed to hit progression-free survival, overall survival or objective response rate endpoints in a mid-stage trial involving patients with metastatic breast cancer.

Full results of the trial will be presented at an upcoming academic meeting, it said.

NewLink’s research collaboration with Genentech for the discovery of next generation IDO/TDO (tryptophan 2,3-dioxygenase) inhibitors continues.