What: Shares of BioCryst Pharmaceuticals (NASDAQ:BCRX), a biopharmaceutical company that develops small-molecule drugs to block key enzymes associated with a variety of disease, were sent to the guillotine and were down as much as 28% at one point following its second-quarter earnings results.

So what: For the quarter, BioCryst reported revenue of $25.8 million, an incredible jump from the $1.5 million recorded in the year-ago quarter. The majority of its revenue in Q2 was tied to the partial recognition of an upfront payment from CSL Limited for the worldwide licensing of Rapivab, a new influenza treatment. Additionally, BioCryst notes that collaboration revenue in association with BCX4430 as a treatment for Ebola increased.

On a bottom-line basis BioCryst delivered a net profit of $4.9 million, or $0.07 per share, compared to a loss in the year-ago quarter of $14.6 million, or $0.23 per share. Comparatively, BioCryst absolutely blew Wall Street's revenue and earnings projections out of the water. It also reduced its net operating cash usage forecast to a range of just $18 million to $28 million from a prior forecast of $65 million to $80 million.

So if all of this went right, what went wrong?

The company also announced that a 14-day treatment cohort would be added to its phase 1 study of healthy volunteers for BCX7353, an experimental treatment for hereditary angioedema. Adding this cohort is going to push back the initial readout of BioCryst's phase 1 results from the third quarter to the fourth quarter, and it's raised doubts among investors as to why the cohort was added, and whether or not the early stage therapy remains safe.

Now what: Overreactions to the upside and downside are a somewhat common occurrence in the biotech sector when you have nothing more than trade on than hope for many companies. Today's downside reaction on the extension of the phase 1 readout does indeed seem a bit harsh when compared to the solid (though unsustainable) profit that BioCryst delivered.

Then again, BioCryst stock had doubled since March, but its avenue to profitability hasn't exactly improved much over that time span. In a best case scenario BioCryst could be hugging the profitability flat-line by 2018. Even though its losses are reduced, they are still, nonetheless, losses. In other words, prior to today's earnings report it's possible investors had been too overzealous with the company's outlook.

So what's an investor to do? My suggestion is not to be too hasty. Yes, today's move lower looks to be a bit harsh, but this is a clinical data-driven stock, and we have a lot of mid- and late-stage data to see before we can make an honest determination if BioCryst is going to be worth $750 million, or more. I'd add BioCryst to your watchlist, but I'd suggest sticking to the sidelines for now.