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: Affymax (Nasdaq: AFFY) plunged as much as 11.6% in early trading today after an unfavorable ruling in a patent dispute with larger drug developer Johnson & Johnson (NYSE: JNJ).

So What: If Affymax gets its Hematide anemia drug approved by the FDA, it's likely to prove a strong competitor to leading anemia treatments maker Amgen (Nasdaq: AMGN). But these pesky patent disputes with J&J are a huge distraction from the Food and Drug Administration approval process, and until they're resolved, it's unclear how Affymax would be able to proceed with marketing and sales of the drug even if it is approved.

Now What: Legal disputes are never easy to call from the sidelines, but given what's at stake, you need a high threshold for risk if you're planning to buy Affymax on the current share price weakness. On the other hand, the potential rewards are massive if Affymax wins and Hematide makes it to market, so Affymax could be a reasonable speculative play for those comfortable with the risks involved.

Fool contributor Anders Bylund doesn't hold a position in any of the companies discussed here. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor recommendation. The Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool is investors writing for investors.