The race to develop a highly effective cholesterol lowering therapy for patients unable to take statins continues, despite some setbacks. A recent revelation prompted a little panic selling, but a bigger event is looming around the corner. There are much bigger concerns for the new drug class that revolve around an unrelated trial with Merck's (NYSE:MRK) market stage cholesterol therapies. 

Late last week, investors noticed a particularly disturbing piece of news in Sanofi's (NASDAQ:SNY) annual SEC filing. Sanofi and partner Regeneron (NASDAQ:REGN) "have been advised by the FDA that it has become aware of neurocognitive adverse events in the PCSK9 inhibitor class." The disclosure goes on to state that neurocognitive adverse events have been associated with the use of statins, but Sanofi doesn't know of any associated with its PCSK9 inhibitor, alirocumab. The agency also wants Sanofi and Regeneron to basically look into it, and consider including neurocognitive testing into subsets of patients in existing trials.

Although the statement seemed fairly benign, shares of Regeneron fell nearly 10% almost immediately after the news spread quickly over Twitter. Regeneron regained much of what it lost in the panic, as did competitor in the PCSK9 race Amgen (NASDAQ:AMGN). Also investing heavily in PCSK9 therapy is Pfizer (NYSE:PFE), which was relatively unaffected by the news.

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A fuzzy feeling
As far as adverse events go, the reports of cognitive impairment that the FDA noted in a consumer report updated earlier this year are minor. Other rarely reported statin issues in the agency's update include risk of diabetes and liver injury.

Apparently the regulator has been following rare cases of cognitive impairment that span all statin products for some time now. Patients affected report feeling "fuzzy" or unfocused. Luckily, the feelings are reversible following cessation of treatment.

A more serious concern
While adverse events of any nature should be a cause for concern, the knee-jerk response to such a benign statement illustrates the heavy anxiety surrounding this new drug class. I think the largest risk factor to companies developing PCSK9 therapies is skepticism surrounding the association of lower LDL cholesterol -- the bad kind -- and risk of heart attack or stroke.

At the moment, the FDA is willing to accept reductions in LDL cholesterol as a surrogate endpoint for long-term cardiovascular benefit. This means that companies like Amgen and Sanofi won't be required to monitor patients for years longer than planned.

Unfortunately for the companies, those rules aren't set in stone. If the agency changes its mind, drugmakers will need to pay for lengthy cardiac outcome studies to determine whether or not patients receiving PCSK9 injections actually suffer heart attack or stroke at significantly lower rates.

An important release
Last November, deputy director of the FDA's division of metabolism and endocrinology Eric Colman told Bloomberg that the agency is waiting on results of an extremely long trial, titled Improve-it. The trial, initiated in 2005, is comparing Merck's Vytorin (ezetimibe/simvastatin) to Zetia (ezetimibe). While Zetia is proven to lower LDL cholesterol in patients who can't take statins, its effect on overall risk of cardiac events is still considered unproven.

Since PCSK9 injections are also intended for patients that can't take statins, the results of this trial, expected this September, might be the event of the year. If ezetimibe doesn't significantly lower the risk of cardiac events, the fallout from Sanofi's recent disclosure may pale in comparison.

In 2008, the controversial Enhance study suggested that the combination of simvastatin and ezetimibe did not result in significant differences in thickness of inner-arterial walls compared to simvastatin alone. It's hardly a death-blow for non-statin LDL cholesterol lowering therapies, but it doesn't inspire confidence either. Pfizer has already hedged its bet on its PCSK9 candidate by initiating cardiac outcomes trials. This September Pfizer's competitors may wish they did as well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.