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 in Celladon Corp (NASDAQ:EIGR) dropped by as much as 10% today after the company reported financial results.

So What: The clinical stage biotech company is working on cardiovascular gene therapies, but its fourth quarter results failed to impress investors.

Celladon's most advanced drug in its pipeline is Mydicar, an enzyme-targeting therapy for systolic heart failure patients that is currently in phase 2b studies. Last year, the FDA awarded Mydicar breakthrough therapy designation, and Celladon expects that it will be able to release top-line data from this Mydicar trial by the end of April.

The potential for Celladon's positive upcoming data did little to support shares, however, as investors moved to the sidelines to avoid the risk of a Mydicar failure.

Regardless, despite Celladon's investments to ramp up facilities and staff that could support an eventual commercialization of Mydicar, the company appears to be in solid financial shape.

The company has $84.9 million in cash and equivalents on its books exiting December, and given that research and development expenses totaled about $33 million last year, Celladon should have enough financial flexibility to avoid further shareholder dilution -- at least for now.

Now What: Investor de-risking in Celladon could have less to do with the company and its prospects and more to do with investors' risk appetite and news regarding Europe.

During the company's conference call, executives suggested that while the FDA appears to be OK with the company's control for false positives, European regulators may require further studies if the company's p value isn't nicely higher than 0.05.

Since trials often fail and Celladon's upcoming data could cause shares to pop or drop next month, there's considerable risk here -- particularly in regard to a potential approval in Europe. However, if Mydicar does prove to be effective in treating systolic heart failure, then it could prove to be a significant drug that reduces hospitalizations for heart failure patients. Given that there are 5.1 million Americans with heart failure and heart failure costs exceed $32 billion annually, Celladon, while risky, may be worth watching.