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 Salix Pharmaceuticals (Nasdaq: SLXP) plummeted more than 20% on Thursday after the company said it expects the Food and Drug Administration to deny its bid to gain expanded approval for its gastrointestinal antibiotic Xifaxan.

So what: Salix already sells Xifaxan to treat travelers' diarrhea and hepatic encephalopathy, but to boost sales significantly, applied last year to have it approved as a treatment for non-constipation irritable bowel syndrome, as well. With at least 30 million in the U.S. suffering from irritable bowel syndrome, Wall Street naturally had some pretty high expectations for the expanded use.

Now what: Salix simply remains far too risky for most Fools. Analysts are now saying that the FDA could delay approval for as much as two to three years and cost the company tens of millions if management elects to run an additional trial. Salix will decide what to do next after it officially receives the FDA's Complete Response Letter, but for investors, the decision to stay away should be an easy one.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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