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 Vanda Pharmaceuticals (NASDAQ:VNDA), a biopharmaceutical company focused on developing pharmaceutical products to treat non-24-hour disorder and schizophrenia, tumbled as much as 23% after reporting worse-than-expected first-quarter results.

So what: For the quarter, Vanda reported total revenue of $9.1 million, a 12% increase from the $8.1 million reported in the year-ago period. Its current quarter included $1.7 million in Fanapt royalty revenue, as well as $7.5 million in amortized royalty revenue tied to the $200 million upfront payment received from Novartis for U.S. and Canadian rights to Fanapt. Operating expenses for the quarter exploded higher to $35.7 million from $12.6 million in the year-ago period, mostly tied to the upcoming launch of Hetlioz, the company's non-24-hour disorder drug in the U.S. Net loss for the quarter widened by just shy of 490% to $26.5 million, or $0.79 per share, compared to a loss of just $4.5 million, or $0.16 per share in the year-ago period. By comparison, Wall Street expected a considerably narrower $0.30 per share loss.

Now what: Vanda shareholders have to enjoy the company's well-capitalized position ($100.4 million in cash, cash equivalents, and marketable securities), but its earnings flops and inability to benefit in any meaningful way from Fanapt are still front and center in the minds of investors. The hope here is that Hetlioz, which has no competition and is preparing to launch in the U.S., can deliver sustainable revenue growth and profits to Vanda. Still, even with Hetlioz, it could be two or three years before Vanda is able to turn the corner to profitability. As such, and keeping in mind its lack of success with Fanapt, I'd suggest investors not be lured in by today's dip and look for more intriguing growth opportunities elsewhere within the biotech sector.

Vanda shares may have soared over the past year, but it'll likely have a hard time keeping pace with this top stock over the long run
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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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