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What: Shares of biopharmaceutical company InterMune (Nasdaq: ITMN) have dropped as much as 10% today after the company announced a common stock and convertible debt offering.

So what: The offering will include 4 million shares of common stock and $100 million in convertible senior notes due in 2018 and include options for the underwriters to purchase up to 600,000 additional shares and an additional $15 million in notes. The company currently has about 60 million shares outstanding and $85 million in long-term convertible notes, so the completion of this offer will notably dilute existing shareholders while also increasing InterMune's debt and leverage.

Now what: InterMune's coffers have been running a little dry lately with cash and equivalents down to $62.5 million last quarter compared to $110.6 million at the end of 2010. The offering will give the company some much-needed cash while it plans to launch its lung disease drug Esbriet in Germany later this week and subsequently throughout Europe early next year. This offering isn't a game changer, even though it has negative implications. It has a lot riding on Esbriet, and the real test will be how the drug performs across the Atlantic and whether it can get the FDA's blessing.

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Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.