Conatus Pharmaceuticals said Monday that it would cut its staff by 40 percent and consider a sale or merger after a drug it was testing as a treatment for an increasingly common form of chronic liver disease failed to beat a placebo in a mid-stage clinical trial—the latest letdown in a number of trial failures.

Conatus Pharmaceuticals Inc said on Monday it plans to explore options and implement a restructuring plan after its liver disease drug failed in a mid-stage trial.

The drug developer's shares halved to 48 cents after the bell.

Conatus Pharmaceuticals’ emricasan has failed another midphase clinical trial. The latest setback saw the Novartis-partnered liver disease drug fail to beat placebo in NASH patients, wiping another 50% off Conatus’ stock price.

Emricasan, a caspase inhibitor, is being developed for the treatment of patients with fibrosis or cirrhosis caused by nonalcoholic steatohepatitis (NASH). Conatus acquired the worldwide rights to emricasan from Pfizer PFE in July 2010.

Eight months after Conatus’ execs tried unsuccessfully to sell a silver-lining playbook story to investors about the failure of a Phase IIb trial for their drug emricasan in fibrosis and cirrhosis, they’re back with another failed Phase IIb — and once again they’ve set out to try and sell it as a win.