What happened

Shares of the mid-cap biopharma Amarin (AMRN -4.65%) plummeted by as much as 31% Wednesday on over 10 times the normal daily volume. The drugmaker's shares were tanking today in response to an appeals hearing over the patents for its heart medication Vascepa. 

Amarin's shares bounced off their lows of the day, but then closed today down almost 31%. 

A man with a look of shock on his face with a downward trending graph in the background.

Image source: Getty Images.

So what

Last March, Vascepa's patents were ruled invalid by a lower court, opening the door to generic rivals and possibly wiping billions in future revenue off the table. Since then, Amarin's stated goal has been to get this patent ruling reversed on appeal.

But Amarin's legal strategy seemingly took a big hit today. The three-judge panel handling the appeal reportedly had zero questions for the defendants Hikma Pharmaceuticals and Dr. Reddy's Laboratories. While it's impossible to say for certain why the judges didn't have any questions for the defendants, Wall Street took this as a bad sign for Amarin's chances of winning on appeal. 

Now what

Is Amarin's stock a bad-news buy? When Vascepa first grabbed its long-awaited label expansion as an add-on to statin therapy in patients with persistently high triglyceride levels late last year, Amarin's future appeared to be extremely bright. This first-of-its-kind heart medication seemed to have a real chance at generating mega-blockbuster sales (greater than $5 billion per year).

The company's fortunes, though, have taken a dramatic downturn in the wake of this adverse patent ruling. Amarin's stock may have a lot further to fall if the company can't catch a break during the appeals process. As such, it might be best to watch this biotech stock from the safety of the sidelines for now.