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 biotech Ariad Pharmaceuticals (Nasdaq: ARIA) surged more than 10% after new data showed that an experimental cancer treatment extended the lives of sarcoma sufferers.

So what: Ariad and marketing partner Merck (NYSE: MRK) say the pill-based drug -- called ridaforolimus -- preserves the benefits of chemotherapy for those suffering from bone and soft issue cancers (i.e., sarcomas). The companies plan to file for approval in the U.S. and Europe this year, Bloomberg reported.

Now what: We don't yet know what ridaforolimus could do for Ariad in the way of revenue, but in an interview with Bloomberg, a Cowen & Co. analyst estimated $300 million by 2015. Even so, Ariad has rallied more than 160% over the past year, and it commands $1.15 billion in market value as of this writing. Investors taking a position here need to realize that they're basically speculating on a buyout bid from Merck or another of the Big Pharma bunch.

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