Pfizer

(PFE) - Get Report

said Wednesday that it has halted work on a lung cancer drug because there was no evidence that the experimental product was better than standard chemotherapy.

The announcement was a bitter blow to

Coley Pharmaceutical Group

(COLY)

, which licensed the drug to Pfizer two years ago. Shares of Coley plunged $4.95, or 58.4%, to $3.55. Pfizer's stock lost 37 cents, or 1.4%, to $25.84 in midafternoon trading.

It wasn't immediately clear if Coley would seek another partner for the drug, known only as PF-3512676.

"This news is surprising based on the signs of clinical activity" in earlier clinical trials, said Robert L. Bratzler, president and CEO of Coley, in prepared remarks. "We are disappointed with this setback in the program."

Pfizer said it decided to stop working on the drug even though four clinical trials are ongoing. An independent safety monitoring board, which periodically reviews studies in progress, conducted an interim analysis that showed that the Pfizer-Coley drug plus standard chemotherapy wasn't better than the chemo alone.

This independent group "concluded that the risk-benefit profile did not justify continuation of the trials," Pfizer said. The company "agrees with the findings ... and is discontinuing the related clinical trials."