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 Celldex Therapeutics (NASDAQ:CLDX), a predominantly clinical-stage biopharmaceutical company focused on developing immunotherapeutic solutions for cancer and other difficult-to-treat diseases, dipped as much as 12% after fourth-quarter earnings results were released before the opening bell this morning.

So what: For the quarter, Celldex reported just $0.6 million in revenue, down 85% from the year-ago period due to a decrease in royalty revenue recognized from Rotarix (there's a tongue twister for you!). The company's net loss, however, was no laughing matter as it shrank noticeably to just $22.1 million, or $0.27 per share, from $81.6 million, or $1.02 per share, in the year-ago period. By comparison, Celldex's loss came in $0.01 per sharenarrower than expected. Celldex noted that it ended the year with $303 million in cash and cash equivalents, which is believed to be enough to fund company operations through fiscal 2016. It also said it anticipates beginning another four clinical studies, on top of the five already ongoing, throughout fiscal 2014.

Now what: This looks like a cut-and-dried case of buy the rumor, sell the news. Celldex's report was better than Wall Street anticipated on a number of accounts, but when all is said and done investors are paying nearly $2.2 billion for a company that is basically clinical in nature. If just a few of these pipeline products fail to meet their endpoints, Celldex's share price could be hit pretty hard. This isn't to say that immuno-oncology therapies aren't all the rage of Wall Street, because they are! However, looking at this reasonably, Celldex is going to need exceptional data and a perfect drug launch to  maintain its current valuation, which to me seems highly unlikely.

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.