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 developing inhaled therapeutics to treat serious lung diseases, surged as much as 41% this morning after announcing that the Food and Drug Administration had granted its lead investigational drug Arikayce the highly coveted breakthrough therapy designation.

So what: According to Insmed's 8-K filing with the Securities and Exchange Commission prior to market open, the FDA granted Arikayce the breakthrough therapy designation for the treatment of adults with nontuberculous mycobacterial lung diseases that are treatment refractory. The FDA based its designation on Insmed's phase 2 study results, and now Insmed will work with the FDA to determine the optimal pathway to a possible regulatory approval for Arikayce. As a refresher, the breakthrough therapy designation allows investigational drugs with game-changing potential to potentially file new drug applications using early and mid-stage data as the basis for approval. It can also result in an expedited review process once an NDA is filed.

Now what: The breakthrough designation on Insmed comes as a bit of a surprise given how mixed its phase 2 results were for Arikayce. While the secondary endpoint of culture conversion heavily favored the Arikayce-treated group with considerably more culture negative patients than the placebo at days 84 and 168, which is a positive, Arikayce also failed to meet its primary endpoint of a statistically significant change in mycobacterial density using a seven-point scale from baseline through week 12. Not to mention that Arikayce was also associated with a higher number of adverse events during its phase 2 study relative to the control arm. Though today's move is clearly positive in that it could push Arikayce toward a new drug application very soon, I'm not sold on Insmed or its lead drug as of yet and would suggest sticking to the sidelines following today's romp higher.