Ugly Side Effects Won't Derail This Drug

Cushing's disease is far from a cushy disease to treat. In fact, there aren't any treatments that have passed phase 3 trials in patients with the hormonal imbalance disease.

Until now.

Novartis (NYSE: NVS  ) said yesterday that SOM230 was able to lower potentially fatal levels of cortisol in a majority of the patients. Even better, at the higher dose, 26% of patients saw their cortisol levels reduced to normal levels after taking SOM230. Not exactly a guaranteed cure, but not bad considering the lack of options.

The drug's efficacy is good enough for an approval, but its side-effect profile is pretty ugly:

Side Effect	Percent of Patients Experiencing the Side Effect
Diarrhea	58.0%
Nausea	46.9%
Hyperglycemia (low blood sugar level)	38.9%
Cholelithiasis (gallstones)	29.6%
Abdominal pain	20.4%
Diabetes	17.9%
Fatigue	11.7%
Increased glycosylated hemoglobin (a sign of diabetes)	10.5%

Source: company release.

There wasn't a control group, so we don't know exactly how many of those side effects are truly due to the drug. Considering that Cushing's disease is potentially fatal and most of those side effects are manageable, Novartis should have a good argument for approval.

That's one of the advantages of treating life-threatening diseases. Whether you're talking about Valeant Pharmaceuticals (NYSE: VRX  ) and GlaxoSmithKline's epilepsy drug Potiga, or Biogen Idec (Nasdaq: BIIB  ) and Elan's (NYSE: ELN  ) multiple sclerosis drug Tysabri, companies can get away with more side effects than if the drug treats a less debilitating disease. VIVUS' (Nasdaq: VVUS  ) Qnexa and Arena Pharmaceuticals' (Nasdaq: ARNA  ) lorcaserin didn't have side effects that were half as bad as SOM230, but the advisory panels recommended against both simply because what they targeted, obesity, isn't that bad compared to something like Cushing's, and many patients have other options to shed the pounds.

Until something that works better or has less side effects comes along -- Corcept Therapeutics (Nasdaq: CORT  ) has a drug in late-stage testing -- it looks like Novartis has a good chance at having the Cushing's disease market all to itself.

Now here's a stock you can stand on.