As Sanofi (NYSE:SNY) / Regeneron (NASDAQ:REGN), Pfizer (NYSE:PFE), and Amgen (NASDAQ:AMGN) prepare for the stretch run to getting their PCSK9 inhibitors, high-potential new treatments for cholesterol, approved by the FDA, a new potential complication has emerged. Sanofi and Regeneron revealed through SEC filings that the FDA is now taking a closer look at potential neurocognitive issues with the entire PCSK9 inhibitor class.
The odds still seem to favor the thesis that PCSK9 inhibitors are safe enough for FDA approval. That said, the role of cholesterol in neurocognitive process is significant, so it's not a ridiculous notion to investigate – particularly considering the possibility that many millions of people will be taking these drugs once they are approved and available.
In the middle of studies, almost all news is bad news
With the exception of prearranged data analyses that can stop a trial early due to overwhelming efficacy, almost any news on an experimental drug in between clinical trial updates is likely to be negative news. Sanofi and Regeneron sort of confirmed that notion when analysts and investors reading Sanofi's 20-F filing (filed on March 7, 2013), saw the following:
"Sanofi and Regeneron have been advised by the FDA that it has become aware of neurocognitive adverse events in the PCSK9 inhibitor class. Neurocognitive adverse events have also been associated with the use of statins for lowering LDL cholesterol. Neither company knows the circumstances under which the FDA became aware of these adverse events or whether these adverse events were observed with a drug candidate tested as monotherapy or in combination with a statin or other cholesterol-lowering agent. The FDA has requested that Sanofi and Regeneron make an assessment of potential neurocognitive adverse events across the global development program for alirocumab, especially in the longer-term studies. Additionally, the FDA requested to be informed about the feasibility of incorporating neurocognitive testing into at least a subset of patients in the ODYSSEY OUTCOMES trial or other long-term Phase III trial(s). While neither company is aware of any neurocognitive adverse event signal relating to alirocumab, if this or another adverse event signal is detected, the further development of alirocumab may be delayed or fail, or its commercial value diminished, which could severely harm future prospects."
As of this writing, there has been no official statement or comment from Amgen or Pfizer regarding this issue, so it may be the case that there was some sort of signal toward neurocognitive events in one of their studies. It's also important to note a key detail of that Sanofi text – namely, that this signal could have been observed in a combination study of a PCKS9 inhibitor and a statin. Neurocognitive adverse events are a known (albeit rare) risk of statins.
Caution seems prudent
At this point, it is hard to fault the FDA for being cautious and wanting more data. The FDA had previously sent a letter to companies developing PCKS9 drugs expressing some concern about long-term use of these drugs, as PCSK9 inhibition is known to reduce neuronal aptosis. What's more, as highlighted by Barclays analyst Ying Huang, the central nervous system accounts for about 2% of human bodyweight, but contains nearly one-quarter of the cholesterol in the body. Given the significant role of cholesterol in CNS functions, taking a closer look at the neurocognitive safety of this new drug class, particularly when millions could be taking the drugs, seems prudent at this point.
Outcomes may matter more than risk
There is certainly precedent for drugs making it through a Phase II study, only to see safety issues emerge in large-scale Phase III studies. Amgen has reported top-line Phase III results for its PCKS9 candidate, but it may be premature to declare them safe. There is also a risk that the FDA may ultimately require more meaningful testing on this issue prior to final approval (not unlike how the FDA basically sprung cardiovascular outcomes testing on the developers of diabetes and obesity drugs).
The bigger long-term concern could be in outcomes testing. There is incomplete data as to whether reducing cholesterol leads to improved long-term outcomes (lower rates of heart attack, stroke, etc.), and Merck's IMPROVE-IT study is going to be closely watched in that regard. Pfizer, Sanofi/Regeneron, and Amgen are all doing long-term outcomes studies (Pfizer's program arguably being the most ambitious), but the results won't be available for several years. Should it prove to be the case that PCKS9 inhibition doesn't actually lead to better long-term outcomes, that would be a far more damaging development to their commercial potential than a small risk of neurocognitive issues in some patients.
The bottom line
The argument can be made that this development hurts Sanofi most of all. Because of the nature of the deal with Regeneron, Sanofi needs alirocumab to generate strong revenue to really move the needle on its financials. That said, the ultimate impact to Sanofi, Regeneron, Pfizer and Amgen seems modest for now, but this issue is definitely going to come up again before this new class of drugs reaches the market.
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Stephen D. Simpson, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.