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 Alexion Pharmaceuticals (NASDAQ:ALXN), a biopharmaceutical company engaged in the development of therapies to treat rare and ultra-rare diseases, rocketed higher by more than 21% after reporting better-than-expected fourth quarter earnings results.

So what: For the quarter, Alexion reported a 38% increase in sales of Soliris, its only FDA-approved drug, to $441.9 million from $320.5 million in the year-ago period. Adjusted net income climbed 45% to $0.87. By comparison, Wall Street had forecasted just $0.83 in EPS on $430.7 million in revenue. Looking ahead, Alexion issued considerably better guidance for fiscal 2014 than Street estimates. It anticipates revenue of $2 billion to $2.02 billion versus estimates of $1.96 billion, and EPS of $3.70-$3.80 compared to the $3.42 estimate on the Street. The upside EPS surprise is primarily due to a lower expected tax rate of just 10%-11% in 2014.

Now what: What we have here is what I'd refer to as a mixed bag. On one hand, the continued growth for Soliris is impressive, and I certainly wouldn't deny Alexion or its bulls the right to tout that investing in ultra-rare disease drugs can be quite profitable. Soliris, because it has orphan-drug status and treats rare disorders, is also protected from generic competition for a long time to come. However, Alexion is also bloated from a fundamental perspective at a valuation of nearly $32 billion. In other words, Alexion is now valued at 16 times estimated 2014 full-year sales, and much of its pipeline still revolves around a single drug. As we've seen from drugmakers like Affymax last year, there can be a lot of inherent dangers of relying on one drug to drive an entire portfolio. With that being said, I'd suggest taking this gift of a rally on the expectation of lower taxes and rising Soliris sales in 2014 and head for the exits.

Alexion may be soaring today, but it may be hard-pressed to keep up with this top stock in 2014
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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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