When investing in stocks, particularly in the biotech sector, there's one thing investors have to understand: expectations.

Consider today's biggest loser in the biotech arena: Pharmacyclics (NASDAQ: PCYC). Revenue surged more than 2,700% year over year. Earnings per share shifted from a loss of $0.21 per share to a $1.09 per share gain. Naturally, shares fell as much as 18% during the day.

The reason has nothing to do with today's financial results -- and everything to do with tomorrow's. The company came out with some less-than-positive commentary around its top cancer drug candidate ibrutinib, which is looking to go up against existing multiple myeloma players such as Celgene's (NASDAQ: CELG) Revlimid, Johnson & Johnson (NYSE: JNJ) and Takeda's Velcade, and a newly approved drug from Onyx Pharmaceuticals (NASDAQ: ONXX), Krypolis.

Follow along in the video below as Max Macaluso and Brenton Flynn run through the news in more detail.