I'll start with the bad news. Overall, as Americans, we are getting fatter and older (a trend I'm gladly contributing to). The good news is that pharmaceutical companies are working on medicines that will help protect us from diseases that are likely to affect people who are fat and old. Currently, the most lucrative class of drugs in the world is the cholesterol-reducing statin drugs, which generated more than $12.8 billion in sales in 2002.
The statin market has more drama and intrigue than the last hour of Godfather I, as most of the prominent "families" of big pharma are involved. Pfizer (NYSE:PFE), the largest pharmaceutical company in the world, is depending on continued growth from Lipitor, the world's best-selling drug (with sales exceeding $6.4 billion in 2002). Merck (NYSE:MRK), whose pipeline has been decimated by recent setbacks, relies on Zocor (the world's second-best-selling drug) for $5.0 billion in sales. Bristol-Myers Squibb's (NYSE:BMY) Pravachol is yet another blockbuster, with $1.8 billion in sales.
Mevacor, which is a joint collaboration between Johnson & Johnson (NYSE:JNJ) and Merck, is an older statin that has come off of patent protection but is still widely used. These four drugs are currently facing new competition from AstraZeneca's (NYSE:AZN) Crestor, a "superstatin" that was approved by the Food and Drug Administration earlier this year.
It's widely accepted that the market for statins is going to expand dramatically in the upcoming years. Twelve million Americans currently take statins, but under the new cholesterol guidelines issued in 2001, up to 36 million people have cholesterol levels that are higher than what is considered healthy (hypercholesterolemia). In addition, hypercholesterolemia is widely undertreated: A recent study from the Centers for Disease Control showed that 60% of people with hypercholesterolemia did not know of their problem. An aging population combined with an increase in awareness among patients and an emphasis among doctors for earlier intervention should result in a sustained expansion of the statin market for many years to come.
Despite the expanding market, competition among statins will be fierce, as Crestor will try to steal market share away from its established cousins. With four major drugs and one strong generic available, how will this market play out? Let's take a closer look at the science to see exactly what we're dealing with.
Cholesterol 101
Since we are talking about anti-cholesterol drugs, we should know something about what cholesterol is and what it does. The big secret about cholesterol is that the majority of it is made by your body. Despite all of the fuss about eating foods low in cholesterol, about 80% of the cholesterol in your bloodstream is synthesized by your liver, which takes fats from food and forms them into useful particles called lipoproteins. This production is not part of a diabolical scheme hatched by your liver to kill you, but is part of the normal function of the body.
Cholesterol is used by your body to make Vitamin D, to create hormones, and to form bile acids that help digest food. However, the process of cholesterol generation is not completely divorced from your diet (put that pizza down!). As more saturated and trans fats reach your liver, more cholesterol is produced.
The most important types of lipoproteins are LDL (low-density lipoprotein) and HDL (high-density lipoprotein). LDL has many of the positive functions of cholesterol mentioned above, but excessive levels of LDL can lead to its deposition in arteries, resulting in a hardening of arteries known as atherosclerosis. Over time, atherosclerosis can lead to strokes or heart attacks. Thus, LDL is known as "bad cholesterol."
HDL, our friendly "good cholesterol," is less understood than its counterpart. It seems to go through the body, collect LDL, and return it to the liver, where it can be properly disposed of or further modified. This process is thought to reduce the likelihood of atherosclerosis and to decrease disease.
A balance between LDL and HDL is required for good health. You can think about it like a constant Easter-egg hunt between the liver and the rest of the body. The liver hides LDL everywhere, and then sends out HDL to go and unearth it. If there's too many eggs (too much LDL) or not enough scavengers (too little HDL), the process goes awry, and LDL builds up in the body.
Since the goal is to reduce the amount of LDL spread throughout the body, pharmaceutical interventions have aimed to either reduce the body's production of LDL or to increase HDL. The statin drugs focus on the former, and although there are no approved drugs to increase HDL, preliminary efforts from Esperion Therapeutics (which was acquired by Pfizer over the weekend) and from Pfizer's torcetrapib, which is currently in phase III trials, have been promising.
Everything you wanted to know about statins
The statin drugs focus on limiting the effect of HMG-CoA reductase, a key enzyme that facilitates the creation of LDL by the liver. Because of this blockage, even if there are a lot of fats present, they are not converted to usable lipoproteins. It's just like the long line at work of people waiting to microwave their lunch. The limiting factor is the one, lone, stained, and smelly 20-year-old microwave, not the supply of frozen meals. If the microwave breaks or is otherwise impaired, people don't get lunch. It's the same with HMG-CoA reductase and cholesterol: The statin drugs simply break the microwave.
So if all of these drugs work on the same end molecule, are they the same? Absolutely not. Much like the erectile dysfunction drugs that we discussed a month ago, the statin drugs may have the same end target and effect, but their chemical structures are unique, resulting in different side effects and functionality profiles. Most important, the drugs differ in terms of potency and efficacy.
Potency refers to the drug's "power," or for a statin, the amount of LDL reduction you would get for a given dose. A 20 mg tablet of Pravachol will reduce LDL by 20%, while the same dose of Zocor will reduce LDL by 35%, making Zocor more potent than Pravachol. The more important value is efficacy, which indicates the amount of LDL reduction at the highest dose. Lipitor used to be the most efficacious drug, but has been supplanted by Crestor.
So what does it mean?
The greater potency and efficacy of Crestor are benefits, but they don't make the drug an automatic winner. Although some patients will certainly benefit from the increased power of the drug, physicians are unlikely to switch patients who are doing well on their current regimen. This resistance stems from two major advantages of the current drugs: well-defined safety profiles and proven benefits for a number of different conditions.
The need for proven safety is a general concern with all new drugs, but is heightened in this case due to the 2001 recall of Bayer's Baycol, another "superstatin" that was pulled from the market after it was potentially linked to more than a hundred deaths worldwide. One worrisome study of high-dose Crestor was stopped after it revealed side effects similar to Baycol.
The existing statins also have a proven benefit. Whereas all of the statins have been shown to reduce LDL levels, only Pravachol, Mevacor, Zocor, and Lipitor have been rigorously tested in large clinical trials that prove that the drugs prevent heart attacks and death from heart disease. Also, many of these drugs are in the process of being investigated for additional indications (uses), such as the reduction of morbidity and mortality in type-2 diabetes, osteoporosis, Alzheimer's disease, and prostatic hypertrophy. The older drugs will have a head start in garnering these indications over Crestor.
In addition, head-to-head studies between the drugs will begin to tease out differences in outcomes. A recent study funded by Pfizer demonstrated a superior performance of Lipitor in reducing narrowing of arteries when compared to Pravachol.
Two further considerations involve current debates in medicine and the modification of existing drugs. Although it is accepted that it is better to have LDL levels of less than 130, there is a great deal of debate as to how low they should be. Some members of the medical community feel that LDL should be kept at around 80, while others think it should be as low as possible. Crestor will benefit from an indication that the lowest value is the best, as its superior efficacy will allow it to push down LDL values. However, Pfizer and Merck are both working on combination pills that will increase the efficacy of their statins. These offerings would dramatically change the marketplace.
Despite the unknowns surrounding Crestor, Pfizer and Merck have not been taking any chances, as they spent a combined $172 million to advertise their statins in 2002. However, AstraZeneca is no stranger to big rollout campaigns, having spent a staggering $192 million during the launch of Nexium last year. This time around, industry analysts predict that the marketing budget for Crestor may be around $1 billion. In addition, AstraZeneca has dispersed 500,000 free 30-day samples of Crestor in an effort to recruit new patients.
Analysts predict that Pfizer's research and marketing machine will push Lipitor to over $10 billion in sales by 2005. Zocor's sales are expected to remain flat, as increases in the number of prescriptions will be offset by generics as the drug begins to come off of patent overseas. The last hurrah for Zocor will be in the fourth quarter of 2005, when its U.S. patent expires. Likewise, sales of Pravachol are expected to slightly increase to a little over $2 billion before its patents expire in late 2005.
Projections for Crestor's future range from $3 billion up to $5 billion. David Brennan, the CEO of AstraZeneca, predicts that Crestor will eventually garner up to 20% of the market. If Crestor is able to demonstrate a clear advantage over its competitors, and is able to put to rest any doubts of its safety, it should be able to combine its clinical victories with effective marketing to establish a strong presence in the market. However, that's a very big $3 billion "if" that will be the toast or the bane of AstraZeneca shareholders for years to come.
Arash Mostaghimi, a guest writer for The Motley Fool, is a student at Harvard Medical School. He also runs a tutoring company in Boston, www.RagingKnowledge.org. He enjoys receiving feedback via email.
