What happened

Shares of development-stage pharma Ampio Pharmaceuticals (NYSEMKT:AMPE) fell nearly 19% today without any news. However, considering the stock rose over 20% earlier in the week -- once again, without any news -- today's move is likely just a simple correction. Even with the precipitous drop factored in, the stock is up 210% in the last year, although the company's market cap is just $190 million.

As of 2:55 p.m. EST, the stock had settled to a 17.9% loss.

So what

Investors have been cheering on Ampio Pharmaceuticals for seemingly rosy data on its lead drug candidate Ampion, which is a potential treatment for severe osteoporosis of the knee. The company released and explained phase 3 results for the drug candidate at the end of 2017. But marketing approval may not be coming.

A finger pointing at a candle chart showing losses.

Image source: Getty Images.

Why not? As explained by prominent biopharma analyst Adam Feuerstein over at STAT, the phase 3 trial wasn't accompanied by the most robust design. Turns out, Ampion has performed no better than saline solution for treating osteoporosis.

Now what

Ampio Pharmaceuticals doesn't have a great reputation, has never generated revenue, and has worked hard to spin mediocre trial data as something more positive. I think the market had the company more fairly valued in the second half of 2017 when it was a penny stock with little going for it. In other words, today's big drop probably won't be the last.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.