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Biogen Inc. (BIIB - Get Report) shares plunged Thursday, wiping nearly $20 billion in value from the biotech group, after it dropped a late-stage trial for a key Alzheimer's disease drug.

Biogen said the phase III trial of aducanumab, which it was conducting alongside Japan's Eisai Co. Ltd. (ESALY) , was designed to study a treatment for patients with mild cognitive impairment due to Alzheimer's disease or mild Alzheimer's disease dementia. It was abandoned after deeming the drug was unlikely to be successful, but noted safety issues were not the basis for the cancellation.

"This disappointing news confirms the complexity of treating Alzheimer's disease and the need to further advance knowledge in neuroscience. We are incredibly grateful to all the Alzheimer's disease patients, their families and the investigators who participated in the trials and contributed greatly to this research," said CEO Michel Vounatsos. "Biogen's history has been based on pioneering innovation, learning from successes and setbacks."

"Driven by our steadfast commitment to patients and our strong business foundation, we will continue advancing our pipeline of potential therapies in Alzheimer's disease and innovative medicines for patients suffering from diseases of high unmet need," he added.

Biogen shares were down 28.9% on the session at $227.75 by late morning in New York, the biggest single-day decline since 2008 and a move that would take about $18 billion in market value from the Cambridge, Massachusetts-based group.

Earlier this month, Biogen agreed to pay $877 million for U.K.-based gene therapy group Nightstar Therapeutics (NITE) in a deal that would add treatments for choroideremia, a rare, inherated eye disease that leads to blindness, to its portfolio.

Last year, Biogen and Eisai said the drug was shown to reduce the rate of cognitive decline in patients with the neurodegenerative disease by 30%, at the highest dose compared to placebo, over an 18-month period, well ahead of the 15% to 20% expectation.

The drug showed statistically significant improvement across a few composite measures, including the Alzheimer's Disease Assessment Scale-cognitive subscale, showing a 47% reduction in cognitive decline. BAN2401 also reduced the amount of amyloid plaque buildup by 93%.