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 the clinical-stage biopharma Cytokinetics (NASDAQ:CYTK) skyrocketed by more than 20%, on heavy volume, at one point today following the company's fourth-quarter earnings release. Although the company posted stronger than expected earnings thanks to research partnerships with AmgenAstellas, and MyoKardia, the stock's spike appears to largely based on news news that Cytokinetics is advancing its experimental amyotrophic lateral sclerosis, or ALS, drug, tirasemtiv, into a late-stage trial. 

According to the press release, the company decided to push the drug into late-stage testing after discussing its midstage results with regulatory authorities in the U.S. and EU. Last year, tirasemtiv failed to meet its primary endpoint of improving ALS symptoms, along with some secondary endpoints such as respiratory function, in a large midstage trial.

While it's not altogether clear what regulators will be looking for in the new trial, the company noted in its clinical update that respiratory function would be included as as one of the key measures of efficacy. 

So what: ALS is a devastating neurodegenerative disorder with few treatment options beyond supportive care. So a drug that shows any form of clinical benefit could stand a chance of gaining a regulatory approval. 

Tirasemtiv's value proposition as an ALS treatment, though, doesn't appear all that tantalizing. The total ALS market is expected to decline to $70 million by 2019, and tirasemtiv doesn't appear to hold any real promise as a game-changing drug at this point.

Now what: Given the sudden rise in its share price and minimal cash position (roughly $83 million, per today's earnings release), this microcap biotech looks ripe for a large secondary offering. As such, you might want to exercise caution on the back of this clinical trial update and earnings release.  

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.