Is the reign of statins as the cholesterol drug of choice about to end? Maybe, even if not immediately.
On Tuesday, Sanofi (SNY) and Regeneron Pharmaceuticals (REGN) won an FDA advisory panel’s recommendation for the approval of a new type of cholesterol drug that may well end up displacing statins as the preferred means of treating high levels of LDL cholesterol.
Moreover, Amgen (AMGN) will hear from the same panel on Wednesday regarding its cholesterol drug, which is based on the same science and premise.
The FDA is not required to follow the suggestion of its advisory panels, though it usually does.
It’s certainly exciting; the market’s not seen a new category of cholesterol drug since the first statin was approved in 1980.
Then again, at a cost of nearly $1,000 per month for the new drug and amid growing doubts that high cholesterol actually causes cardiovascular disease, it’s not as if SNY, REGN and AMGN are destined to be catapulted higher on the heels of the approval.
Meet the New Class of Cholesterol Drug
This new class of anti-cholesterol medicines are known as PCSK9 inhibitors.
PCSK9 is a protein that can prevent the human liver from effectively filtering out LDL cholesterol. By staving off the development of the protein before it can interfere with the liver’s normal function, Sanofi and Regeneron Pharmaceuticals (and Amgen) claim the result is measurably lower levels of LDL.
Specifically, the AMGN/REGN trials indicated most of the patients using their PCSK9 inhibitor — called Praluent — saw between a 40% and 60% reduction in their LDL cholesterol levels.
The results observed thus far more or less mirror those achieved by statins, although PCSK9 inhibitors seem to be slightly more effective for more people. The PCSK9 inhibitor class of cholesterol drug isn’t as well positioned to take the market by storm as some might think, though.
Don’t Expect an Immediate Smashing Success
SNY and REGN investors should temper any dreams of Praluent becoming an overnight sensation.
For starters, Praluent as well as the similar cholesterol drug developed by Amgen (called Repatha) are injected intravenously rather than an orally-taken pill. While Praluent and Repatha are only injected once every two weeks whereas a pill-based treatment like Lipitor is taken every day, an injection taken every two weeks is still a nuisance, at best.
An even bigger stumbling block for AMGN, SNY and REGN, however, may be the price tag.
A wide array of generic statins are available at a cost of only a few dollars per month. Praluent and Repatha, on the other hand, are projected to cost close to $1,000 per month. At that price, insurers and/or customers could balk.
Perhaps the most significant issue, though, is uncertainty regarding the drug’s ability to actually prevent cardiac events like heart attacks or strokes, and a lack of clarity on its long-term safety. Advisory panel member Kenneth D. Burman summed up the potential impasse quite well, saying “it seems probable that the drug will be safe over time … we need longer-term studies.”
The data doesn’t exist yet simply because Praluent and Repatha have only been tested for a relatively short while. AMGN and REGN expect to have that information by 2017, after they have a chance to observe its long-term benefit as well as monitor any unexpected adverse side effects.
In the meantime, the FDA’s advisory panel believes the drug’s ability to lower LDL cholesterol is compelling enough to put it on the market.
Not a Slam Dunk for REGN or SNY (or AMGN)
Above all else, would-be and current SNY or REGN shareholders need to know Praluent has not yet been approved by the Food and Drug Administration. As was noted, the FDA generally does act on its panels’ advice, but it doesn’t have to.
Moreover — and perhaps more applicable in this particular case — the Food and Drug Administration could limit the approved situations in which the new cholesterol drug could be used.
Panel chairman Robert Smith voiced the idea that the benefit of lowered LDL cholesterol “may be different for different patient groups,” underscoring an opinion held by a handful of the panel’s members that the cholesterol drug in question should only be approved for those patients who can’t control it any other way.
The FDA could still tack that restriction on to any approval.
Putting all the pieces of the puzzle together, even a complete victory — an unconditional FDA approval — is no guarantee of a windfall. And, with a big price tag likely for the new cholesterol drug, anything less than an unconditional approval could be viewed as a letdown.
Tread lightly here.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
