Within the next few days, stocks for two orphan drugmakers could either soar or sink. Both Aegerion Pharmaceuticals (NASDAQ: AEGR) and Raptor Pharmaceuticals (NASDAQ: RPTP) have catalysts coming next week. Here's what could happen.
For Aegerion, all eyes will be on how well the launch for Juxtapid has gone. The company announces first quarter results on April 30.
Juxtapid received approval from the U.S. Food and Drug Administration last December. The drug is used to lower cholesterol levels in patients with homozygous familial hypercholesterolemia, or HoFH. This disease is a rare and severe lipid disorder that affects around one in a million births.
Earlier this year, Aegerion laid out its plans to commercialize Juxtapid. The company said that it would focus on identifying patients who are potential candidates for the drug and educating health care providers. Aegerion CEO Marc Beer stated that he expected to "end 2013 with approximately 250-300 patients on therapy on a global basis."
Kynamro costs $176,000 per year per patient. That's expensive, but not as much as Juxtapid, which costs $235,000 to $295,000 per year.
Investors will be anxious to find out if the higher pricing hurt Aegerion's efforts. That might not be the case if the company's sales team was able to effectively position Juxtapid as the safer alternative. While both drugs can have severe side effects, the FDA advisory committee appeared to view Juxtapid more favorably than Kynamro. The committee voted 13-to-2 for Juxtapid and 9-to-6 for Kynamro.
Yea or nay?
April 30 is an important date for Raptor also. The FDA is scheduled to announced its decision on the company's New Drug Application for Procysbi.
The drug targets the treatment of nephropathic cystinosis, a rare and sometimes fatal metabolic disorder. Cystinosis is currently treated most often with Cystagon, which is marketed by Mylan Pharmaceuticals (MYL).
Procysbi and Cystagon are two different forms of cysteamine bitartrate. Cystagon is released immediately and must be taken on a strict schedule every six hours -- including during the middle of the night. Procysbi is a delayed release form of cysteamine bitartrate that can be taken twice daily.
Clinical studies found that Procysbi was statistically as effective as Cystagon. While there were some adverse effects, Raptor reported that no serious unexpected issues emerged that were attributable to Procysbi.
Although the FDA pushed back its decision on Procysbi from January to April, that shouldn't raise concerns about the drug's chances. Delays of three months aren't unusual.
Analysts see annual sales for Procysbi of around $150 million. Considering that Raptor's current market cap is less than $360 million on no revenue, a positive decision by the FDA should make the stock take off.
We still have to wait a few days to find out what will happen, so whether Aegerion and Raptor shares sink or soar is anyone's guess at this point. It's a tough call on how well Aegerion's efforts on Juxtapid fared during the first quarter. I think things could have gone either way.
While anything can happen with FDA decisions, I expect Raptor will receive good news by next week. A positive FDA announcement would mean even better news to the families with loved ones suffering from nephropathic cystinosis.