Amarin Corp. PLC (NASDAQ: AMRN) shares absolutely fell off a cliff in late March, but the stock price has gradually pushed higher since then. Even though a court ruling crippled Amarin stock, shares have gained nearly 50% since then. Is Amarin’s future really getting brighter, or are tailwinds from the rising stock market pushing it higher?

While the Dow Jones industrial average, S&P 500 and Nasdaq have largely sold off over the past couple of months, a turnaround looks to be in the works. It is said that a rising tide lifts all ships, and Amarin initially was thought to be sunk but now is making a handy recovery.

In mid-December 2019, the U.S. Food and Drug Administration (FDA) approved Vascepa as the first and only therapy for reducing cardiovascular risk, as studied in the Reduce-It cardiovascular outcomes study. Essentially, this drug helps to prevent additional risk of heart attacks.

Amarin’s recent earnings report and update paint a good outlook for the stock, but there are still many unanswered questions.

Painting the Earnings Picture

One month after the district court ruling, Amarin reported its first-quarter financial results, and they were incredibly positive. Investors did not respond by sending shares higher, but the underlying fundamentals from the report and company updates were positive.

During this quarter, net total revenue more than doubled year over year to a record level on the back of Vascepa prescription growth in the United States. Revenue increased 112% to $155.0 million, up from $73.3 million in the first quarter of last year.

The company also increased the size of its U.S. sales force for Vascepa in the first quarter to approximately 800 representatives plus their managers. All these new hires completed training and are interacting with health care providers. Commencing in mid-March, those interactions were transitioned to telephonic or other forms consistent with social distancing practices due to the COVID-19 pandemic.

In Canada, Amarin’s partner began promotion of Vascepa in the first quarter. That partner purchased Vascepa capsules to support their launch. These purchases for Canada represented the majority of Amarin’s net product revenue from outside the United States in the first quarter.

Amarin’s partner in China is nearing completion of its clinical trial of Vascepa. The results are expected to come out later this year, based on the assumption of a limited impact from COVID-19.

In Europe, the marketing authorization application for Vascepa with the European Medicines Agency (EMA) is undergoing review. Amarin expects an approval recommendation near the end of 2020, and associated European Community (EC) approval is expected promptly thereafter, assuming continued limited impact of COVID-19 on the review.

Litigation Update

Some quick background: a Nevada federal district court ruled in favor of two companies that had challenged Amarin’s patent on Vascepa. The plaintiffs in the case were generic drugmakers Dr. Reddy’s Laboratories Inc. (NYSE: RDY) and Hikma Pharmaceuticals. The firms had previously argued that Amarin’s patent claims were “obvious.” GlaxoSmithKline PLC (NYSE: GSK) already had received FDA approval for a similar product, Lovaza, as a treatment for high triglyceride levels.

The ruling in Nevada ultimately calls into question the safety of Vascepa’s patent. It declares that even though generic versions of Vascepa would infringe on claims in Amarin’s patent, those claims were “obvious” and invalid. Amarin holds six patents on Vascepa, a synthetic formulation of fish oil.

Now, Amarin is taking this to the appeals court.

The company recently disclosed that it and the defendants in the patent litigation pertaining to the initial indication for Vascepa in the United States have agreed to expedite proceedings for the appeal of the district court decision. The parties have requested the U.S. Court of Appeals for the Federal Circuit approve an expedited schedule, including a requested briefing in the second quarter of 2020 and an expedited hearing.

This proposed timing should facilitate a hearing in the third quarter of 2020 (or perhaps early in the fourth quarter) and position the court to rule thereafter, potentially in 2020 or early 2021. Amarin believes that it has a strong basis for appeal.

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