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 Amarin (NASDAQ:AMRN), a biopharmaceutical company focused on developing therapies to treat cardiovascular diseases, dropped as much as 10% after announcing a senior note exchange at its wholly owned subsidiary, Corsicanto Limited.

So what: According to Amarin's pre-market press release, its subsidiary entered into an exchange agreement with select note holders whereby $118.734 million in aggregate 3.5% 2012 notes, due 2032, will be exchanged for $118.734 million in aggregate 2014 notes, also yielding 3.5%, still due in 2032. As noted, $31.266 million of the 2012 notes will remain outstanding following this exchange. The catch is select holders of these 2014 notes will be allowed to convert this debt into shares of Amarin at a price equivalent to $2.60 per share, though the release notes that this applicable exchange needs to be conducted at 110% of the applicable exchange price, or $2.86, if conducted after Jan 19, 2018.

Now what: "Now explain that in English, please!" Simply put, Amarin's subsidiary exchanged debt which could have been redeemed as early as 2017 for new debt which can't be redeemed until Jan. 19, 2019 at the earliest. While that's typically a good thing, Amarin also allowed the noteholders of these 2014 notes the ability to exchange their debt for shares of Amarin -- if shares move above $2.86 for a pre-specified period of time, that is. For current shareholders, that means the likelihood that bondholders are going to flood the market with convertible shares and dilute existing investors if there's a considerable rally in Amarin's share price.

Admittedly, though, Amarin shareholders have much more pressing things to worry about, such as the need for a cardiovascular outcome study with Vascepa if Amarin has any hope of expanding its indications for its FDA-approved drug. With the company burning through its cash and Vascepa sales essentially capped in the near-term, this is a company I'd strongly suggest you avoid.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.