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 bioprocess company Repligen Corporation (RGEN -0.19%) are up 13% today after the company announced 2014 earnings this morning. The company supplies critical components to the fast-growing biopharmaceutical industry.

So what: Well, there must be some good news in there, right? Indeed. Repligen accomplished several impressive feats of growth in 2014:

 

2014

2013

% Change

Product Revenue

$60.4 million

$47.5 million

27%

Bioprocessing Gross Profit

$32.4 million

$25.0 million

30%

Bioprocessing Gross Profit

53.6%

52.7%

1.7%

Operating Income

$10.7 million

$7.7 million*

39%

*Adjusted to not include royalty revenue that ended in 2013. Source: Repligen press release.

It's important to remember that in 2013 Repligen earned a substantial amount of royalty revenue ($17.9 million to be exact) from Bristol-Myers Squibb. When the calendar turned to 2014, the royalties ended. That affected total revenue last year, but since royalties are essentially cost-free, the end of the revenue stream affected earnings by a nearly similar -- and outsized -- amount. In other words, don't look at total revenue, operating income, or net income comparisons for the previous two years and allow your brain to catch on fire.

In 2014 Repligen grew its product portfolio with the acquisition of ATF, expanded its manufacturing facility in Massachusetts, and improved gross margin for its existing products. Oh, and the company's stock soared 56%. By all accounts, it was a great year for investors.

Management expects much of the same in the year ahead. Here's the guidance for 2015:

 

2015 Guidance

% Change from 2014

Total Revenue

$72 million to $75 million

19% to 24%

Product Gross Margin

55% to 57%

2.6% to 6.3%

Operating Expenses

$60 million to $62 million

13% to 17%

Operating Income

$12 million to $14 million

12% to 31%

Source: Repligen press release.

Not even a large increase in operating expenses, aimed at expanding markets for existing products, can scare investors from their excitement.

Now what: The growth will continue for Repligen in 2015. And why not? The company supplies critical biotech products and services to the exploding biopharmaceutical industry. I would caution investors to consider Repligen's high price-to-earnings ratio, which now exceeds 80 (!), when weighing the decision to purchase shares or add to an existing position. Does the company really deserve a $1 billion market cap? While valuation concerns haven't stopped the stock from trekking higher in the past, it only takes one time.