WebMD Health Corp said it called off discussions with potential acquirers and warned that 2012 profit would be significantly lower as clients slash expenses to offset revenue loss from drugs losing patent protection.

Shares of the health IT services provider, in which activist investor Carl Icahn owns a nearly 10 percent stake, tumbled 29 percent after the announcement. WebMD also said Chief Executive Wayne Gattinella resigned, and Anthony Vuolo, currently chief financial officer and chief operating officer, will serve as interim CEO while the board conducts a search.

For 2012, the company expects revenue to fall 2 percent to 8 percent, and said its expects increased competition in its consumer products market this year.

The company also expects expenses will rise by as much as 5 percent to 8 percent in 2012 due to investments in long-term growth opportunities such as mobile and international areas and new advertiser products.

With the higher expenses and lower revenue, WebMD said it expects net income will be significantly lower than 2011.

The company said it had started a process to consider strategic alternatives late last year that resulted in talks with several potential acquirers. But a special committee of the board has now ended those discussions and its process to review a potential sale, WebMD said on Tuesday.

Shares of the company fell 29 percent to $26.25 in premarket trading.

(Reporting by Lewis Krauskopf in New York and Esha Dey in Bangalore)