Source: Flickr via user zhouxuan12345678.

What: As of 12:10 p.m. EST, Eagle Pharmaceuticals' (NASDAQ:EGRX) stock was down by more than 20% on higher-than-normal volume. The catalyst driving the drugmaker's shares lower today was the news that the U.S. Food and Drug Administration, or FDA, issued a Complete Response Letter in response to the company's New Drug Application for its novel ready-to-use bivalirudin product called Kangio.

Kangio is basically a more-convenient form of The Medicine Company's (NYSE:MDC) FDA-approved blood-thinner Angiomax, which raked in $23.2 million in the fourth quarter of 2015.

So what: Some investors were hoping that The Medicine Company would strike a lucrative licensing deal with Eagle if Kangio was approved. After all, Angiomax's sales have been getting hammered due to the introduction of generic competitors in the past year. With the FDA rejecting the drug, though, that idea probably needs to be shelved for the time being. 

Now what: As per its press release, Eagle's management stated that the FDA is requesting further "characterization of bivalirudin-related substances in the drug product," and said that they plan on working with the agency to address this issue.

Taken at face value, this brief insight into the FDA's decision seems to imply that the company should be able to resubmit Kangio's regulatory application in the near future, and perhaps gain an approval before year's end. Keeping with this theme, Eagle's consensus 12-month price target still stands more than 100% higher than current levels despite a handful of downgrades following this news. In other words, the Street seems fairly confident in Kangio eventually getting the green light from the FDA. 

Investors may want to tread lightly with Eagle for the moment. After all, the market hasn't been kind to biopharma companies of late, especially those with negative regulatory events.

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.