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 Insmed (NASDAQ:INSM), a clinical-stage biopharmaceutical company focused on developing inhaled therapies to treat patients with lung diseases, tumbled as much as 14% after reporting mixed results for Arikayce in a phase 2 study for treatment-resistant nontuberculous mycobacterial lung infections.

So what: According to the press release from Insmed before the opening bell, Arikayce failed to meet its primary endpoint in its midstage study, but did meet a critical key secondary endpoint. The primary endpoint of the study was the "semi-quantitative measurement of the change in mycobacterial density on a seven-point scale from baseline (day one) to the end of the randomized portion of the trial (day 84)." As Insmed noted, there was a positive trend in favor of Arikayce, but it did not meet the criteria of statistical significance with a high p-value of 0.148. What is noteworthy is that it met the secondary endpoint of culture conversion with 11 of 44 patients demonstrating negative cultures by the end of the trial compared with just three of 45 patients in the control arm. Furthermore, the results showed that more adverse events were associated with Arikayce compared to the placebo during the trial.

Now what: Rarely do you see such a clash of positive and next news all in one clinical study, but that's exactly what we've got here. Normally a primary endpoint failure would be the end of it and the company's share price in question would sink, but this statistically significant secondary endpoint data shows promise for Arikayce -- so much so, in fact, that research firm Leerink Swaan boosted its price target on Insmed to $30 from $22. But looking at this from a pessimists perspective, even though Arikayce only had one suspected unexpected serious adverse reaction, which is consistent with the placebo group, the sheer increase in AE's could be concerning to physicians and patients were it to ever make it to market. Arikayce also comprises Insmed entire pipeline, albeit across two other indications outside of treatment-resistant mycobacterial lung infections. Until we have some answers on where Arikayce heads next following Insmed's talks with the Food and Drug Administration, I can't think of a better recourse than to stick to the sidelines.