Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Amylin Pharmaceuticals (Nasdaq: AMLN) soared a staggering 46% Wednesday on news that the diabetes-drug maker recently rejected a $3.5 billion unsolicited takeover bid from Bristol-Myers Squibb (NYSE: BMY).

So what: Citing two sources close to the matter, Bloomberg reported that Bristol-Myers offered to buy Amylin for $22 per share, representing a 43% premium to its closing price on Tuesday. Although Amylin reportedly rejected the bid, the news itself suggests that the company's exposure to the growing diabetes drug space is being underappreciated by the market.

Now what: I'd be cautious about riding this wave of momentum. Amylin's recent approval of Bydureon -- a weekly version of its Byetta -- has certainly strengthened its position in diabetes treatment, but the company continues to face intense competition from much larger rivals, all while carrying a heavy debt load. When you couple those headwinds with today's share-price spike, the risk/reward trade-off seems rather unattractive at this point.  

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