Sometimes the market punishes you for your own mistakes. Other times, it punishes you for your competitor's mistakes. Amgen (AMGN) got a brutal dose of the latter on Tuesday.

Shares of the biotech giant cratered 9.8% to $394.56, putting the stock on track for its worst single-day loss since October 2000. That's not a typo. We're talking about a drop not seen in 26 years.

The damage didn't come from Amgen's own pipeline. It came from a rival's failure.

Novartis (NVS) announced that pelacarsen, its investigational therapy targeting lipoprotein(a) — or Lp(a), a type of cholesterol linked to heart disease — failed to cut cardiovascular death, heart attacks, or strokes compared to placebo in a pivotal Phase 3 trial. The drug did lower Lp(a) levels as designed, but that didn't translate into clinical benefit for patients.

Novartis's ADR shares took an even harder hit, plunging 14% in what was their worst session ever.

But here's where it gets interesting for Amgen. Investors immediately marked down Amgen's own Lp(a) candidate, olpasiran, which targets the same lipid but uses a different mechanism. The logic? If Novartis's drug — which successfully lowered Lp(a) — couldn't improve outcomes, why would Amgen's drug be any different?

BMO Capital piled on, cutting Amgen's rating to Market Perform. The sell-off spread across the biotech sector, with the iShares Biotechnology ETF (IBB) down 1.8%.

It's a stark reminder that in biotech, a competitor's failed trial can be just as damaging as your own. The market is essentially saying: if the mechanism doesn't work, it doesn't matter how clever your chemistry is.

For Amgen, the road ahead just got a whole lot bumpier. The company will need to convince investors that olpasiran is different — that its distinct approach will yield results where pelacarsen fell short. That's a tough sell on a day like this.