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Shares of Ligand Pharmaceuticals (LGND -1.95%), an owner of royalty assets in the healthcare space, are falling by more than 13% as of 3:30 p.m. EDT in response to its partner Amgen (AMGN -0.66%) reporting disappointing clinical news.

So what

Amgen released Phase 3 results from its CLARION trial earlier today. This was a head-to-head study that pitted Amgen's hit cancer drug Kyprolis against Takeda's Velcade in treating patients with newly diagnosed multiple myeloma.

Results from the 54-week study showed that patients who used Kyprolis showed a progression-free survival (PFS) of 22.3 months. Unfortunately, that was only slightly ahead of the 22.1 months observed in the Velcade group, so the trial failed to prove statistical significance. In addition, patients in the Kyprolis group had a fatality rate of 6.5%. That was higher than the 4.3% rate observed in the Velcade group.

Traders are punishing Ligand's stock in response because it earns a royalty on total sales of Kyprolis. In fact, Ligand credits much of its recent financial growth to the huge success of Kyprolis. Thus, if this clinical update ultimately leads to a slowdown in sales of Kyprolis then it threatens to slow Ligand's revenue and profit growth, too.

Now what

While this news certainly isn't good, I'm more inclined to look at this drop as a buying opportunity than a reason to abandon ship. While Kyprolis is an important drug, investors should remember that Ligand currently has 150 other partnered or licensed programs in development. That gives the company multiple ways to win, even if Kyprolis doesn't live up to its full potential.

Currently, analysts are projecting that Ligand's profit growth will exceed 45% over the next five years. While that rate is likely to fall in light of today's update, shares were only trading for about 21 times next year's earnings estimate to begin with. I'd argue that that valuation was already quite low given the company's prospects, so it wouldn't surprise me one bit to see shares bounce back from today's drubbing in the coming weeks.