What: Shares of Esperion Therapeutics (NASDAQ:ESPR), a cholesterol drug specialist, saw its shares crumble by more than 40% today on tremendous volume after the company provided investors with an end of Phase 2 update for its experimental treatment, ETC-1002, indicated for hypercholesterolemia. According to the press release, the company plans on performing multiple late-stage trials to evaluate the drug's effectiveness in both patients with so-called "statin intolerance" and those where even maximally tolerated statin therapy inadequately controls their levels of low-density lipoprotein cholesterol (LDL-C). 

So what: While it's typically a good thing when a clinical-stage biopharma announces that it is progressing a potential blockbuster candidate into late-stage trials, this promising clinical update did come with a bit of a catch that investors apparently weren't thrilled about, seeing how the stock reacted today. Specifically, management noted that the FDA is urging Esperion to promptly launch a cardiovascular outcomes study as part of the drug's late-stage assessment, which may need to be completed prior to a regulatory review, depending on the analysis of the drug's risks vs. benefits.

Now what: Cardiovascular outcome trials for novel cholesterol medicines aren't cheap and they can easily take several years to complete. Put simply, Esperion is rapidly falling behind its competitors in the race to bring the next generation of potent cholesterol medicines to market. Perhaps even more concerning, though, is the fact that company may need to access the public markets at some point to raise the money needed to fund these trials. As such, I'm personally content to watch this speculative biopharma safely from the sidelines for the time being.