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 Pharmacyclics (UNKNOWN:PCYC.DL), a biopharmaceutical company developing small-molecule therapies to treat cancer and other immune-mediated diseases, dipped as much as 12% after reporting its first-quarter earnings results before the opening bell.

So what: For the quarter, Pharmacyclics reported total revenue of $119.4 million, a more than 40-fold increase from the $2.8 million in revenue reported in the year-ago period. This was comprised of $56.2 million in Imbruvica sales following its first full quarter as an approved therapy for mantle cell lymphoma and $60 million in milestone payments from marketing partners Janssen Biotech, a subsidiary of Johnson & Johnson (NYSE:JNJ). Adjusted profit for the quarter soared 200%, reversing course from a loss of $0.40 per share in the year-ago period to a profit of $31.3 million, or $0.40 per share. By comparison, both estimates crushed the Street's forecast of $0.22 in EPS and $104.4 million in revenue.

The wheels fell off the wagon, however, when Pharmacyclics issued its full-year net product sale guidance of $295 million, plus or minus 5%. Keep in mind this figure doesn't include milestone payments, but then again milestone payments can be completely unpredictable. In other words, investors had a hard time deciphering Phamacyclics' net product sales guidance next to Wall Street's $417.4 million full-year revenue consensus.

Now what: Investors may not be pleased with the guidance, but everything appears to be taking shape nicely for the company. In February, Pharmacyclics had Imbruvica approved in the chronic lymphocytic leukemia indication, and that is by far a larger market than mantle cell lymphoma, lending hope that sales of the drug are going to quickly soar.

The key point investors are going to want to hone in on moving forward is whether Pharmacyclics can be profitable sans milestone payments. Although it could receive up to an additional $380 million in development, regulatory, and approval milestone payments, investors wants to see Imbruvica sales sustaining Pharmacyclics before they push the company any higher. I personally expect Imbruvica to shine and hit blockbuster status in due time, but following Pharmacyclics' monstrous run over the past five years, I'm still not dipping my toes into the water -- at least not yet.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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