September is National Cholesterol Education Month -- I kid you not. Always willing to do my part to celebrate random holidays and educate Fools at the same time, here's how to make money off the 65 million Americans -- and the ones overseas, as well -- who have high cholesterol levels.
The behemoth
Pfizer's
How did Pfizer grow the franchise into a nearly $12 billion enterprise worldwide? Lipitor is a little better than what was available when it came on the market, but I also think marketing had a lot to do with building up sales as well. In the age of increasing price controls, I have a hard time seeing another drug getting anywhere close to the sales that Lipitor managed.
Guilt by association
When Lipitor goes off patent, sales of other cholesterol drugs could be hurt as well. There may be a reason to take AstraZeneca's
How bad could it be? Look how much Lipitor fell after experiencing indirect generic competition when generic versions of Merck's
2006 |
2007 |
2008 |
2009 |
2010 YTD |
|
---|---|---|---|---|---|
Lipitor U.S. sales (millions) |
$7,849 |
$7,195 |
$6,332 |
$5,667 |
$2,623 |
Year-over-year increase (decrease) |
6% |
(8%) |
(12%) |
(10%) |
(5%)* |
Source: Company earnings releases. YTD = Year to date.
* Compared with the same period of 2009.
Good cholesterol is hot
In addition to statins -- Lipitor, Crestor, Zocor, and Bristol-Myers Squibb's
But niacin has an annoying side effect that makes many people flush. The hot flashes are so bad that many patients go off the medication. Abbott Labs'
Merck has been working on a combination pill, Tredaptive, which includes niacin and a drug to counteract the flushing. The pill seems to work -- it's approved in more than 45 countries -- but the Food and Drug Administration turned down the marketing application in 2008 because the agency wanted more data. The ongoing trial should allow Merck to get approved in 2012.
Abbott also has another cholesterol drug, TriCor, which is used to increase good cholesterol and also has the advantage of lowering triglycerides, but it's also headed for generic competition soon. Abbott is busy trying to get patients to switch to its newer Trilipix, but the advantages aren't likely to be great enough for the franchise to take a hit once generic TriCor is available.
In the pipeline
There's a genetic disease called familial hypercholesterolemia, which causes patients to have insanely high cholesterol levels. Even with a cocktail of drugs described above, patients still have dangerously high cholesterol levels that can cause them to die from heart disease. That is until Isis Pharmaceuticals
If it works that well for the really sick, might it work in the general population? In theory, yes, but the drug raises liver enzyme levels, which is often a sign of impending liver damage. The side effect isn't likely bad enough to keep Isis and marketing partner Genzyme
Big market, stay away
Even though the cholesterol drug market is huge, the impending patent expirations are going to make it hard for investors to make serious money in the space. Sure drugs like Tredaptive and mipomersen will be able to find niche markets, but they'll never reach the sales levels obtained by Lipitor.
I'd suggest looking at anti-inflammatory market for a large market that's ripe for new drug alternatives.