Metabasis Therapeutics yesterday delivered a one-two punch of bad news to investors regarding its experimental diabetes and hepatitis therapies, sending its shares plummeting more than 50 percent.The San Diego-based company said its developmental therapy for Type 2 diabetes failed to meet efficacy endpoints in a midstage trial. Meanwhile, the company said Schering-Plough Corp. has terminated its license to use the hepatitis B treatment after the drug showed increased incidence of cancer in testing on rodents.

“We are surprised and disappointed by the results we have seen so far in this important Phase 2b clinical trial, especially after the promising preclinical and early clinical results from smaller 14-day and 28-day studies,” said Mark Erion, chief scientific officer.

The company still has many unanswered questions about the compound and plans to work closely with strategic collaborator Daiichi Sankyo Co. to get insights for the further development of the compound.

Metabasis Chief Executive Paul Laikind said this was a failed trial but not a failed drug-development program.