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 Synta Pharmaceuticals (NASDAQ:SNTA.DL) dropped by nearly 20% today on high volume after the company announced a secondary offering of 22,000,000 shares of its common stock at a price to the public of $1.75 per share.

This public offering will generate gross proceeds of approximately $38.5 million for the company and is expected to close on April 6, 2015. However, Synta is granting the underwriters a 30-day option to snap up a whopping 3,300,000 additional shares.

So what: Dilutive financing deals like this one are part and parcel of the biopharma landscape, especially among small, clinical-stage companies. Even so, they do have a dramatic effect on share price, shown by today's action.

Now what: Synta's future hinges on the results of the pivotal late-stage trial, GALAXY-2, for its experimental heat shock protein 90 inhibitor, ganetespib, indicated as a potential treatment for non-small cell lung cancer. If this trial yields positive results, Synta's lead clinical candidate would probably go on to become a major revenue driver for the company, especially given that it is presently being tested in several additional trials as a broad-based cancer treatment. 

That said, investors should keep in mind that heat shock protein 90 inhibitors don't exactly have a confidence-inspiring track record when it comes to pivotal late-stage trials.

Although next-generation therapies like ganetespib might have what it takes to break through on this front, the market clearly isn't optimistic -- assigning the drugmaker a sub-$300 million market cap despite owning a coveted late-stage oncology asset. So, you may want to play it safe with this one, sticking to the sidelines until the company's platform is further along in development.