NEW YORK (TheStreet) -- Shares of Infinity Pharmaceuticals  (INFI - Get Report) are plummeting by 68.25% to $1.40 on heavy trading volume early Tuesday morning, as the biotechnology company will reduce its workforce by 21% as part of a restructuring announced in the wake of a disappointing drug study.

A Phase 2 study of its treatment for non-Hodgkin lymphoma met its primary endpoint of overall response rate, but the company had hoped it would provide a larger clinical benefit, CEO Adelene Perkins said in a statement.

The overall response rate (ORR) of 46% was lower than the 54% response rate of a rival treatment from Gilead Sciences (GILD), RBC Capital wrote in a note.

JPMorgan consequently downgraded the stock to "neutral" from "overweight" and removed its $10 price target.

"We view these data as un-competitive, given our prior physician work that was calling for a 65%+ ORR, driven by a higher complete response rate relative to key competitor Gilead's Zydelig," the firm wrote in a note.

Infinity Pharmaceuticals noted that its restructuring will include the closure of its discovery research organization, resulting in a loss of 46 jobs. RBC estimates that the company will burn $40 million per quarter, implying year-end cash around $70 million or between $1 and $2 per share of cash. 

About 4.9 million shares of Infinity have been traded so far today, well above its average trading volume of roughly 367,684 shares per day.

Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.

Infinity's weaknesses include its disappointing return on equity and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: INFI

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.