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 Receptos (UNKNOWN:RCPT.DL), a clinical-stage biopharmaceutical company focused on developing therapies to treat various immune disorders, rocketed higher by as much as 40% after reporting positive phase 2 study results for RPC1063, its oral investigational treatment for relapsing multiple sclerosis, or RMS.

So what: According to Receptos' press release, which came just after the market close yesterday, in the phase 2 portion of its RADIANCE trial RPC1063 met its primary endpoint of reduction in MRI brain lesion activity. Most importantly, RPC1063 was deemed safe and well-tolerated. Specifically, the goal of the study was a reduction in the cumulative number of total gadolinium-enhancing lesions as determined by an MRI from the 12th week of treatment to the 24th week. As noted, patients experienced statistically significant gadolinium-enhancing lesion reductions of 86% at both the 0.5 mg and 1 mg dose. A phase 3 study involving RPC1063 is already under way per the Special Protocol Assessment pathway, and will pit RPC1063 against Biogen Idec's Avonex across 1,200 patients with relapsing multiple sclerosis.

Now what: There's no other way to look at this as anything but good news for Receptos and its shareholders. I will say that RMS is a tough disease to treat and Biogen Idec has quite the stranglehold on MS-based market share, so Receptos is going to have quite the fight on its hands even if RPC1063 does eventually gain approval. I am, however, always a bit leery of companies that only have one or two drugs in the development pipeline as a single failure can wipe out a lot of shareholder value. In this case Receptos is studying RPC1063 in RMS and ulcerative colitis, and RPC4046 as a possible treatment for eosinophilic esophagitis. Two investigational drugs and only three indications means there's a lot riding on Receptos' nearly $900 million valuation. For now, I'm happily sticking to the sidelines.

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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