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 biotechnology company Ligand Pharmaceuticals (NASDAQ:LGND) sank 10% this morning after its quarterly results disappointed Wall Street.

So what: The stock has skyrocketed over the past year on solid royalties and milestone payments, but today's Q2 results are prompting investors to rein in a bit of their excitement. While revenue surged 67% over the year-ago period, a few analysts suggest that there's still too much uncertainty surrounding Ligand's pipeline -- particularly Promacta -- to justify such a seemingly lofty valuation.

Now what: Management now sees full-year EPS of $0.47-$0.50 on revenue of $43 million-$46 million.

"[T]he coming quarters look promising as we anticipate further growth in royalty revenue, potential approvals for a new royalty-bearing drug and label expansions, NDA filings for partnered products and completing our first full year of operational profitability," said CEO John Higgins.

So while Ligand is still way too speculative for average Fools, today's pullback might be an overreaction that biotech-savvy traders may want to pounce on.