Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Ocular Therapeutix (NASDAQ:OCUL) dropped by nearly 30% on exceptional volume today after releasing disappointing late-stage clinical trial results for its experimental treatment, OTX-DP, a small implantable plug that releases medicine (dexamethasone) designed to reduce ocular inflammation and pain following cataract surgery.

According to the press release, OTX-DP met its primary endpoint of reducing post-surgical pain but not inflammation. The company said that both primary endpoints needed to be met for this confirmatory trial to be considered successful. 

So what: Last month, Ocular reported that OTX-DP had met both of these same primary endpoints in its first late-stage trial. So, this second trial was meant to confirm these earlier results, boosting the chances of a successful regulatory filing. 

Now what: Unfortunately, the company didn't provide much insight into why OTX-DP failed to significantly reduce swelling in the eye in this trial -- whereas it did in its prior late-stage trial. All we know now is that the analysis is still ongoing and Ocular's management plans on meeting with the Food and Drug Administration soon to discuss the discrepancy, as well as a potential regulatory pathway. 

That being said, there isn't a pressing need for new treatments to reduce post-operative swelling in cataract patients, given that eye drops work just fine for most patients. Indeed, the main idea behind OTX-DP was to provide patients with a more convenient method of managing swelling and pain after surgery.

After today's news, though, OTX-DP looks like it will face an uphill battle with the FDA. And that's why you may want to stay safely on the sidelines in the wake of this major clinical setback.