Relmada Therapeutics (US:RLMD) shares tumbled more than 75% on Thursday after the biotechnology company said its most promising drug failed in late stage testing.

The company said its REL-1017 candidate for treating depression and, in some cases, performed less well than the test's placebo.

Analysts from financial firm Truist downgraded the shares to hold from buy and said the news casts doubt over the drug's effectiveness in trials with other afflictions.

Specifically, he doubts that two Phase 3 studies of the drug for use with other medications to treat major depressive disorder are now at risk, saying there is a 40% chance the drug passes the new tests versus 70% before the news.

Other analysts echoed the sentiment.

Oppenheimer downgraded the shares to "market perform" from "outperform" and posted a $7 a share price target, implying no rebound from Thursday's rout. Oppenheimer's price e target had been $64.

Mizuho Securities analyst Uy Ear says investors are now likely bearish on those studies.

"Investors will likely lose confidence in the adjunctive Reliance I and II studies," he said in a report to clients. He has a buy rating and a $50 price target on Relmada stock.

But one man's trash is another man's treasure, and Relmada rival Axsome (US:AXSM)  saw its shares jump more than 10 percent on the news.

It's the company's second piece of good news in the last few months following its August US Food & Drug Administration approval for its depression treatment called Auvelity.