(Reuters) – Novavax Inc shares crashed 65 percent on Thursday after data showed its vaccine failed to prevent RSV disease, a leading cause of respiratory infections in infants, missing the main goal of a late-stage study.

RSV, or respiratory syncytial virus, is highly contagious in children, and is the leading cause of infant hospitalizations in the United States. There is currently no vaccine approved to prevent the virus.

While it causes little more than common cold in some patients, it could lead to serious lung infections and even death in high-risk patients like babies and the elderly.

The experimental vaccine, when administered to pregnant women, was unable to prevent medically significant respiratory tract infection caused by the virus in infants, Novavax said.

The late-stage trial failure raises questions about the drug’s future, coming two years after the company cut about 30 percent of its workforce to fund testing of the vaccine, ResVax.

Novavax shares dropped to penny-stock territory after the selloff that was set to erode more than $500 million off the company’s market value.

Although the study failed its main goal, it showed some benefit against RSV hypoxemia or oxygen deficiency in the blood.

“While this study did not meet the pre-specified success criterion for the primary clinical endpoint of this trial, the data indicate that ResVax protects infants from some of the most serious consequences of RSV,” Chief Executive Officer Stanley Erck said in a statement.

The company said it planned to meet with U.S. and European health regulators to review the data.

(Reporting by Manas Mishra and Saumya Sibi Joseph in Bengaluru; Editing by Sai Sachin Ravikumar and Saumyadeb Chakrabarty)