Madness has gone dark. The ‘R’ did us in.” With that short email message to a writer at The New Yorker magazine, director Guillermo del Toro confirmed today that At the Mountains of Madness, his long-planned and highly anticipated adaptation of H.P. Lovecraft’s classic horror novella, is dead in the water. Del Toro had been trying for months to get his dream project—the story of a group of scientists who encounter an ancient race of deadly alien creatures while on an expedition in Antarctica—greenlit at Universal. But, despite the fact that James Cameron was on board to produce and Tom Cruise was loosely attached to star, the studio apparently balked at the idea of making a big-budget 3-D horror film, deeming the project’s hefty $150 million price tag, combined with del Toro’s insistence on making the film R-rated, too big a gamble. With Madness shelved for now, del Toro is being courted to direct a PG-13 monster movie called Pacific Rim for Legendary Pictures. “Stay tuned,” a source close to the project tells EW, hinting that an announcement could come at any time. As for Madness, its future is unclear. With a trio of heavy hitters like del Toro, Cameron, and Cruise behind it—and fanboys already starting an online petition to get the project greenlit—it’s possible the film might eventually find a home at another studio. “It could still happen,” a source close to the film says hopefully. “I want to see it.” But, for now at least, it seems that a big-budget R-rated 3-D horror film like Madness is just too big a mountain for Hollywood to climb.

UPDATE: Del Toro has confirmed to Deadline that Pacific Rim will indeed be his next film. It will begin shooting in September.