Side effects may not kill Isis Pharmaceuticals (Nasdaq: ISIS) and Genzyme's (Nasdaq: GENZ) cholesterol drug mipomersen, but they could severely diminish the potential patient population that would be willing to take it.

If that opening paragraph sounds familiar, it's because I used it earlier this year when the duo released phase 3 data for mipomersen. Yesterday it was deja vu all over again, with new clinical trials, but the same result.

Mipomersen clearly works. In patients with severely high cholesterol levels, the drug was able to reduce the cholesterol levels by 36% in one study and 37% in another. Patients taking placebo saw their cholesterol levels go up 13% in the first study and down just 5% in the second.

Unfortunately, mipomersen clearly has side effects too. In the first study, 20% of the patients taking mipomersen dropped out of the study due to adverse events; it was almost 25% in the second trial. In both cases, like in earlier trails, elevated liver enzymes were the major culprit. Elevated liver enzymes are a sign of potential liver damage although Genzyme and Isis haven't seen any actual damage.

So it basically comes down to: Would you rather have a chance of dying of a heart attack, or a chance of liver failure? The answer of course depends on the likelihood of each occurring.

The risk of potential liver issues is probably worth it for patients with genetic mutations that keep them from reducing their cholesterol to a reasonable level despite being on other drugs such as Pfizer's (NYSE: PFE) Lipitor, AstraZeneca's (NYSE: AZN) Crestor, Merck's (NYSE: MRK) Zetia, and Abbott Labs' (NYSE: ABT) Niaspan. For other less-severe patients, the benefit probably isn't worth the risk; at least not until the actual potential for liver damage is worked out in a large number of patients over an extended period of time.

The companies plan on filing for marketing approval in the U.S. and EU in the first half of next year. Risk-benefit analysis is fairly subjective, but I think Isis and Genzyme have a good chance at convincing the regulatory agencies that the benefits outweigh the risk in the most severe patients.

An approval in other patient populations is less likely, which will be a mighty blow to Isis, because much of the development and commercial milestone payments in its deal with Genzyme are tied to development of the drug beyond the most severe patients.

For investors, the 10% drop since the announcement might represent an opportunity, but I'm not particularly enthused.

Convinced to take Isis and Genzyme off your radar? Fly on over to our 11 O'Clock Stock series to see what company our analysts have picked for today. Hint: Fly.

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