Torcetrapib would have been prescribed as a combination treatment with world's best selling drug Lipitor (atorvastatin) and has been pitched as a key foundation for Pfizer's cholesterol business.
The two together would allow Pfizer to defend its franchise in the build up to patent expiry in 2011.
Pfizer stopped the trials after an independent safety board found an imbalance of mortality and cardiovascular events.
Statins such as Lipitor can significantly reduce levels of LDL or "bad" cholesterol in the blood in two ways.
They slow production by inhibiting an enzyme in the liver called HMG-CoA reductase.
Statins also increase the ability of the liver to remove LDLs from the blood by stimulating LDL receptors.
However, they only have a moderate ability to increase levels of HDL or "good" cholesterol.
Torcetrapib was developed to raise HDL levels by inhibiting CETP, a protein in the liver that transfers cholesterol.
Torcetrapib has been in development for over 15 years and the US pharmaceutical giant has spent around €750m on the clinical trials alone, describing it at the time as the "the largest and most comprehensive clinical trial development programme ever. "
Last year, Pfizer also unveiled a €68m extension to a manufacturing plant in Ireland in order to produce torcetrapib for the trial.
But such values are dwarfed by the money Pfizer receives from Lipitor, which generates more than double the revenue of any other drug.
Annual sales last year of over €9bn accounted for nearly 25 per cent of Pfizer's total revenue.
Even before the patent for Lipitor has expired, Pfizer has successfully beaten off challenges from competitors such as Ranbaxy who want to produce cheaper copycat versions of the drug.
Pfizer's decision to market torcetrapib with Lipitor has angered generic competitors who fear it will reduce the demand for Lipitor alone.
Pfizer also faces competition from other pharmaceutical companies that have developed more effective cholesterol treatments.
Merck & Co produces Vytorin, which is a mixture of the statin simvastatin and ezetimibe, the latter of which prevents cholesterol absorbtion in the intestine.
In trials of diabetes patients, Vytorin was shown to be more effective than Lipitor in reducing cholesterol.
Jeffrey Kindler, chief executive at Pfizer said: "With regard to our business, we understand the challenge that this represents and we will respond quickly and aggressively to it."
Mr Kindler also said that Pfizer's previously announced plan for transforming the company would be accelerated.