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.

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.