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 drugmaker Salix Pharmaceuticals (Nasdaq: SLXP) climbed as high as 10.5% on Tuesday after the company reported positive phase-3 data for an oral version of its constipation treatment, Relistor.

So what: While exact numbers weren't given, the "highly statistically significant" results increase the odds that the treatment will become a game-changer for Salix and especially for its much smaller partner Progenics Pharmaceuticals (Nasdaq: PGNX). In fact, a Jefferies analyst estimated that an oral form of Relistor could drive annual revenues of $500 million-$800 million a year.

Now what: I wouldn't be so quick to ride Salix's momentum. Management plans to submit the New Drug Application for oral Relistor in mid-2012, but judging from the stock's 65% price surge over just the past three months and its current P/E of 35, Mr. Market already seems to have baked in much of the upside. In fact, at the time of this writing, the stock is up only 5%, so investors might be starting to "sell the news."  

Interested in more info on Salix? Add it to your watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.