A closely watched Phase III study of a Gilead Sciences drug for nonalcoholic steatohepatitis has failed.

The Foster City, California-based drugmaker said Monday that the STELLAR-4 trial of selonsertib in patients with compensated cirrhosis – also known as F4 fibrosis – due to NASH did not meet the primary endpoint of improvement in fibrosis without worsening of NASH within 48 weeks.

Shares of Gilead opened down 4.2 percent on the Nasdaq Tuesday morning following the news.

“While we are disappointed that the STELLAR-4 study did not achieve its primary endpoint, we remain committed to advancing therapies for patients with advanced fibrosis due to NASH, where there is a significant unmet need for effective and well-tolerated treatments,” Gilead Chief Scientific Officer John McHutchison said in a statement. “Gilead has a long-term commitment and proven track record of addressing significant challenges in the field of liver diseases.”

Nevertheless, despite the company’s shares taking a hit, the results were in line with investors’ expectations. In a note to investors Monday evening, Cowen analyst Phil Nadeau said the results were a disappointment, though not a surprise, due to skepticism on the trial’s chances of success from both investors and physician key opinion leaders.

The STELLAR-4 results, Nadeau wrote, bode poorly for another Phase III trial, STELLAR-3, in bridging – or F3 – fibrosis, whose results are due in the second quarter of this year. When the bank had polled the physicians in October, they were somewhat less pessimistic about STELLAR-3’s chances given that F3-stage fibrosis is not as difficult to reverse as F4. “However, the fact that selonsertib did not produce any meaningful trend in STELLAR-4 decrease the chances of success in STELLAR-3,” he wrote, pointing to p values in the STELLAR-4 results – 1.0 and 0.56 – that indicate lack of statistical significance.

STELLAR-4 enrolled 877 patients who were randomized to receive selonsertib at 18mg, 6mg or placebo. The drug is being investigated as a once-daily, oral inhibitor of apoptosis signal-regulating kinase, also known as ASK1.

There are currently no approved treatments for NASH, an advanced form of nonalcoholic fatty liver disease that is rapidly growing worldwide alongside Type 2 diabetes. According to a report last August by ResearchAndMarkets.com, the global market for NASH drugs is forecast to grow from $1.17 billion in 2017 to $21.47 billion by 2025.

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