On Monday, Europe's top ranked and largest biotech firm, Actelion shared that its insomnia drug almorexant has been hit by safety problems in a late-stage trial, despite the fact that it managed to reach all its main targets. The nature of the concerns has not been specified.

The company has said that the safety observations over the drug, which is being developed in association with GlaxoSmithKline, cannot be detailed properly until more long-term data is made available. The announcement led to the company's shares tumbling down.

"In absence of details, the market will not be able to evaluate the risks now. Instead, there will be fear that the risk of a spectacular phase III failure has increased", said Kepler Capital Markets analyst Tero Weckroth.

As per analysts, Actelion is "overly dependent" on its at least billion-dollars-a-year drug for heart and lung problems, Tracleer, and needs to expand its reach and look to develop more drugs to bank upon, which fight a higher range of diseases. In such a scenario, the concerns discovered have come as a major setback to the firm.

Shares of the company dropped by 4% to 56.0 Swiss Francs. Glaxo also recorded a 0.4% decline in share prices.