Xenoport’s spell of disappointing news continued last week with the announcement that XP13512, its lead drug candidate, which is partnered with GlaxoSmithKline, failed in a phase II trial in diabetic neuropathic pain. Shares in the company have dropped 16% since, and at $14.61 are trading close to three-year lows.

Last year, when the stock touched $65 at one point, the US company was looking overvalued with investors seemingly assuming the pipeline would progress on a best case scenario. Following a setback to approval of XP13512 in its lead indication, restless leg syndrome (RLS), and the failure of another candidate, XP19986 in GERD, the market now appears to be expecting a worst case outcome. By the end of the year, it should be clearer which stance is deserved.