Isis Pharmaceuticals (NASDAQ:ISIS) and Genzyme (NASDAQ:GENZ) nailed it. As in over-the-fence-and-10-rows-deep-home-run nailed it.

Their cholesterol drug, mipomersen, lowered cholesterol levels in homozygous familial hypercholesterolemia (hoFH) patients by 25%, compared to a 3% reduction for placebo. With a p-value of less than 0.001, there's a 0.1% chance that the data was due to chance.

(Just so you know, familial hypercholesterolemia is an inherited disorder where the person cannot remove the "bad" LDL cholesterol from the bloodstream. This leads to very high cholesterol levels beginning at birth. People with hoFH inherit the gene causing this from both parents and are in even worse shape, with cholesterol levels that may exceed 600 mg/dL. Now, back to your regularly scheduled article.)

So if the data is so good, why is Isis trading down over 8% so far today?

First, the phase 2 data was so good that most investors -- me included -- would have been shocked if mipomersen didn't meet its phase 3 goals. And you can throw Genzyme into that group, considering it gave Isis a $325 million up-front payment for the rights to mipomersen. There was little upside to be had.

Potential side effects are probably also contributing to Isis' slump today. Of the 34 patients who entered the drug side of the study, six dropped out, including one that discontinued due to elevations in liver enzymes -- a sign of liver toxicity. Lots of promising drugs have never made it to market because of potential liver toxicity.

Patients with hoFH desperately need to get their cholesterol levels down, so the relatively high dropout rate and potential liver toxicity probably won't keep the drug off the market.

But Isis and Genzyme are hoping that mipomersen will treat a wider patient base than just the rare genetic disorder. In order to treat less severe diseases, mipomersen is not only going to need to beat other cholesterol drugs like Pfizer's (NYSE:PFE) Lipitor, AstraZeneca's (NYSE:AZN) Crestor, and Merck's (NYSE:MRK) and Schering-Plough's (NYSE:SGP) Vytorin, but it will need to do so relatively safely. Only larger studies will tell us how bad the liver toxicity really is.

Data from those trials are expected before Genzyme and Isis file for regulatory approval in the second half of next year, so investors will know whether mipomersen is a grand slam before the drug hits the shelves.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a recommendation of the Inside Value newsletter. The Fool has a disclosure policy.