Source: Medivation.

What: Ahead of news that the FDA has put a partial clinical hold on a key drug trial, shares in Medivation (MDVN) dropped 32.4% in January, according to S&P Capital IQ.

So what: In December 2014, Medivation acquired rights to MDV9300, which was believed to be a PD-1 inhibitor that works similarly to Merck & Co.'s (MRK -1.04%) Keytruda and Bristol-Myers Squibb's (BMY 0.73%) Opdivo, from CureTech.

In December 2015, Medivation initiated a phase 2 study of MDV9300 in relapsed or refractory large B cell lymphoma (DLBCL) and suggested that if the trial is successful, then a big unmet need could lead to the FDA considering an accelerated approval.

However, on Jan. 25, Medivation filed an 8-K with the SEC because it concluded that MDV9300 isn't a PD-1 targeting therapy after all.

Medivation doesn't yet know how MDV9300 works and it's knee-deep in trying to figure it out, but unfortunately, the FDA has placed a partial clinical hold on the DLBCL trial that will keep patients from being enrolled in the study until that happens.

Now what: The revelation is important because MDV9300 is a key part of Medivation's strategy to diversify its revenue beyond its top-selling prostate cancer drug, Xtandi.

Xtandi, which saw global sales grow to $547 million in the fourth quarter, has been winning market share away from Johnson & Johnson's (JNJ -1.23%) multibillion per year Zytiga, but Johnson & Johnson is developing a new prostate cancer drug that could eventually slow demand for Xtandi and as a result, pressure is building on Medivation to usher new drugs to market.

Given MDV9300 is in a holding pattern, hope shifts to MDV3800, a PARP-inhibitor that Medivation acquired from BioMarin (BMRN -1.03%) last fall. A phase 3 trial studying MDV3800 in advanced breast cancer patients with BRCA mutations is expected to wrap up in June, so investors might want to keep a close eye on Medivation's press releases this summer.