Incyte Corp said it would stop testing its best-selling blood cancer drug, Jakafi, in solid tumor cancers after the treatment's effectiveness was found to be insufficient in a late-stage study, sending its shares down 16 percent premarket.

The company said it would discontinue a late-stage study testing the drug in pancreatic cancer and mid-stage studies in breast and lung cancers, two weeks after pulling the plug on another mid-stage trial in colorectal cancer.

Treating solid tumors was viewed as an important pillar of future growth for the company in 2016, J.P. Morgan Securities analysts said, adding the move may not be a major surprise.

The decision will also likely put more pressure on Incyte's other drug candidate, epacadostat, which is also being tested in multiple solid tumor indications, the analysts wrote.

Incyte said it would continue to evaluate the drug in hematology indications.

Cancer is divided into two main types — solid tumors, which affect muscles, bones and organs; and cancers of the blood.

Jakafi, the company's biggest revenue generator, is approved to treat patients with polycythemia vera, a bone marrow disorder; and mylofibrosis, a type of blood cancer.

The drug raked in net product revenue of $601 million in 2015, a 68 percent jump from a year earlier.

Sales of Jakafi also helped the company top Wall Street's revenue estimate for the three months ended December, the fourth straight quarterly beat.

Jakafi works by inhibiting the enzymes, Janus Associated Kinase (JAK) 1 and 2, that are involved in regulating blood and immunological functioning.

Incyte said on Thursday the decision to test the drug in solid tumors followed a mid-stage study that suggested survival benefit in patients.

"Unfortunately, the larger studies did not confirm this hypothesis," Chief Drug Development Officer Rich Levy said.

Incyte's shares were down 15.36 percent at $61.20 before the bell. The stock had fallen 33 pct this year to Wednesday, compared with a 26 percent drop in the broader Nasdaq Biotechnology Index.

(Reporting by Amrutha Penumudi in Bengaluru; Editing by Sriraj Kalluvila)