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 drug developer Pharmacyclics (Nasdaq: PCYC) are soaring 15% after the company blew Wall Street's second-quarter estimates.

So what: In December, Pharmacyclics entered into a collaborative deal with Jaansen Pharmaceuticals, a subsidiary of Johnson & Johnson, which resulted in an upfront payment of $150 million and potential royalties of up to $1 billion. This payment resulted in Pharmacyclics recording $77.9 million in revenue and a profit of $0.82, excluding one-time items. Now compare this to Wall Street's expectations for just $2.9 million in revenue and a loss of $0.19, and you'll understand why the company is surging so much today.

Now what: Up until now, I have been brutally wrong with my underperform call on Pharmacyclics. The company has set up some very lucrative partnerships and has ample cash to conduct the 11 clinical trials currently under way. Still, with no trials past phase 2, I can't help but be skeptical of Pharmacyclics' $1.6 billion valuation. Until Pharmacyclics has an approved drug, there's simply no value left in the stock price.

Craving more input? Start by adding Pharmacyclics to your free and personalized watchlist so you can keep up on the latest news with the company.