Over the past few months, broader equity markets have shown significant volatility. In this uncertain environment, one timeless investment principle has become increasingly relevant: prioritizing well-established, consistently profitable companies. While small-cap stocks theoretically offer higher growth potential than their larger counterparts, the risks involved often make them not worth the gamble.
With this backdrop, let’s examine Amarin (AMRN), a small pharmaceutical company that has performed reasonably well over the past twelve months but doesn’t deserve your investment. Instead of betting your hard-earned money here, consider an industry leader like Novartis (NVS).
Amarin’s shares have climbed approximately 22% over the past year. However, the stock’s future looks highly uncertain. The company does have an approved product on the market—Vascepa, a medication designed to reduce cardiovascular event risks. The problem? Generic versions of this drug have been available for years. The direct consequence is that sales are moving firmly in the wrong direction. For fiscal 2025, total revenue declined 6.5% year over year to $213.6 million.
To its credit, Amarin hasn’t stood still. After losing patent exclusivity for its core product, the company developed a turnaround plan and has made some progress. Through workforce reductions and other cost-cutting measures, it narrowed its net loss per share from $0.20 in 2024 to $0.09 in 2025—a notable achievement given declining sales.
Additionally, Amarin is engaged in a legal battle with generic drugmaker Hikma Pharmaceuticals, alleging that Hikma marketed its generic version of Vascepa in ways that infringe on a still-patented use of the original medicine. The case has reached the U.S. Supreme Court. A victory could send shares soaring.
The company has also adjusted its commercialization strategy. It partnered with Italy’s Recordati to market Vascepa in 59 countries, primarily in Europe, receiving a $25 million upfront payment with potential milestone payments of up to $150 million. This deal shifts commercialization expenses and generic-related risks to its partner.
Commendable as these efforts are, Amarin’s fundamental risks remain unaddressed. With no pipeline candidates and revenue completely dependent on a single, off-patent product, its outlook appears exceptionally bleak. For this biotech stock, the best strategy remains avoidance.
The difference between Amarin and Novartis couldn’t be starker. Novartis boasts a vast product portfolio spanning numerous therapeutic areas, generating consistent revenue and earnings. In 2025, Novartis reported sales of $54.5 billion, up 8% year over year, while earnings per share rose 15% to $8.98.
Even when key products lose patent protection, Novartis’s extensive lineup provides a significant buffer, allowing it to absorb a year or two of declining sales. Case in point: its blockbuster heart failure medication Entresto lost patent protection last year. Yet Novartis still expects slight sales growth in 2026.
The companies’ pipelines reveal another crucial difference. As a pharmaceutical giant, Novartis is running dozens of clinical trials, at least some of which will lead to new approvals or label expansions. Several newer products are already materially impacting financial results—which explains why Entresto’s patent loss isn’t a fatal blow. Fabhalta, a treatment for two rare disorders first approved in December 2023, generated $505 million in revenue in 2025, a 291% year-over-year increase.
Novartis may not dominate headlines like companies leading the hot weight-loss market, but its underlying business remains robust. Its shares have gained approximately 59% over the past twelve months, demonstrating solid long-term potential. For income-focused investors, Novartis represents a high-quality dividend stock—the company has increased its payout every year since 1996.
Considering all these factors, Novartis clearly represents a far better investment than Amarin. In today’s volatile market, rather than chasing uncertain opportunities among small-cap stocks, choosing an industry giant with deep foundations and a rich pipeline makes more sense. The “security” Novartis provides is something no thin narrative can match.
