Image source: Achillion Pharmaceuticals.

What: Despite announcing a key new hire last month, shares in the clinical-stage drugmaker Achillion Pharmaceuticals (ACHN) dropped 37.3% in January, according to S&P Capital IQ.

So what: On Jan. 4, Achillion Pharmaceuticals announced it had hired Bristol-Myers Squibb's (BMY 0.59%) former head of discovery chemistry, Joel Barrish, as its chief science officer. The move comes as Achillion Pharmaceuticals attempts to broaden its clinical lineup beyond the hepatitis C drugs it licensed to Johnson & Johnson (JNJ -0.47%) last summer.

In that licensing pact, Johnson & Johnson gained rights to Achillion Pharmaceuticals' promising odalasvir, an NS5A inhibitor that delivered 100% cure rates when used alongside Gilead Sciences' (GILD -1.29%) Sovaldi in treatment durations of as little as six weeks.

In October, Johnson & Johnson initiated phase 2 studies that included odalasvir in combination with its own hepatitis C drugs. The trial is evaluating the ability to cure hepatitis C in about four weeks.

Now what: In licensing its hepatitis C compounds to Johnson & Johnson, Achillion Pharmaceuticals teams up with one of the planet's largest drugmakers and gains the potential to earn up to $1.1 billion in milestones plus royalties. It also got Johnson & Johnson as an equity investor that owns over 18 million shares.

Although the potential associated with Achillion Pharmaceuticals licensing deal is big, the continuing drop in Achillion Pharmaceuticals' shares shows that investors remain underwhelmed.

Ideally, investors would have preferred for Johnson & Johnson to buy Achillion Pharmaceuticals outright, particularly given that many investors worry an odalasvir combination therapy will end up reaching the market too late to win away market share from Gilead Sciences.

Ultimately, only time will tell if investors are right to walk away from Achillion Pharmaceuticals shares, but we should get some additional insight soon when Johnson & Johnson's midstage study wraps up. If results are good, then late-stage studies could potentially lead to a market entry as early as 2018. In the meantime, Achillion Pharmaceuticals' shareholders will have to hope that Barrish can usher along some new drugs into trials that rekindle investor interest.