What happened

Shares of PTC Therapeutics, Inc. (NASDAQ:PTCT) have fallen 17.3% as of 11:53 a.m. EDT on Tuesday. Recently released briefing documents left investors even less hopeful an upcoming independent advisory panel meeting will vote in favor of approving Translarna for the treatment of Duchenne muscular dystrophy (DMD), a fatal genetic condition with a dearth of treatment options.

So what 

A major catalyst for PTC Therapeutics is just around the corner. On Thursday, Sept. 28, an independent panel of physicians will advise the Food and Drug Administration in regard to the company's new drug application for Translarna. The controversial drug has failed to reach primary efficacy endpoints, and the briefing documents panel members will receive pulled no punches regarding the lack of positive data that led the FDA to refuse to file the application last year.

A frustrated male investor with head on a table in front of a downward sloping chart.

Image source: Getty Images.

In short, PTC hasn't shown that Translarna treatment can lead to a clinical benefit as measured by the distance DMD patients can walk in six minutes. Exploratory analyses of the data revealed trends that warrant further investigation, but PTC has instead decided to throw everything it has at the wall now to see if something will stick. Given the scathing remarks in the briefing documents, though, it looks like the company should try again once it has more data.

Now what

PTC Therapeutics is generating sales in the European Union, where Translarna earned a conditional approval in 2014. Second-quarter sales of the drug nearly tripled compared to the prior-year period to an annualized run rate of about $183 million.

An approval in the U.S. would send sales and the stock skyrocketing, but it doesn't look like the advisory committee has much to work with. There's a chance the company might slide through the door Sarepta opened with Exondys 51 last year, but betting on another controversial approval isn't a sound investment strategy. It's probably best to watch the drama unfold from a safe distance.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.