Statins' cholesterol-lowering ability and a growing global need for cholesterol-busting treatment have turned statins into some of the most widely-prescribed drugs in the world. But until recently, investors hoping to profit from the billions of dollars spent on cholesterol drugs every year have had few investment options because patents have expired -- or will soon expire -- on the most widely-prescribed of them.
However, a new generation of cholesterol fighters is making its way to market, and that means investors have a few more investment options to consider, including these three companies. Let's learn more about them.
No. 1: Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) -- Praluent
Co-developed by Regeneron and Sanofi SA (NASDAQ:SNY), Praluent belongs to a new class of cholesterol-lowering injectables that could hit the market this year.
Unlike statins, which lower cholesterol levels by reducing the production of a cholesterol-creating enzyme, Regeneron's Praluent is a PCSK9 inhibitor that lowers bad cholesterol levels by increasing the number of bad-cholesterol receptors in the liver, which helps the body remove more cholesterol from the bloodstream.
Targeting cholesterol in this manner is a novel approach, and results from Praluent's clinical trials were impressive. In an 18-month phase 3 trial, bad-cholesterol levels in patients taking 150 mg of Praluent every two weeks alongside statin therapy were 62% lower than they were for patients taking a placebo plus statins.
Those clinical trial results could mean that the FDA will give the drug a green light for use in patients with stubbornly high cholesterol. A decision is expected on July 24. If the FDA does give a go-ahead, analysts think Praluent's use could spread beyond the tough-to-treat cases to a wider population of people at risk of heart disease. As a result, analysts think the total market for PCSK9 inhibitors could total as much as $4 billion per year, with Praluent capturing about $2 billion of that.
Sanofi's licensing deal calls for the two companies to split any profit from Praluent sales in the U.S. and to share profit on overseas sales on a sliding scale that begins with Sanofi's receiving 65% and Regeneron's receiving 35%. Praluent is likely to have a much bigger positive impact on the much smaller Regeneron than it will have on the much larger Sanofi, and for that reason, Regeneron could be the better investment alternative of the two.
No. 2: Amgen (NASDAQ:AMGN) -- Repatha
Regeneron and Sanofi could end up competing with Amgen's Repatha, another PCSK9 inhibitor, as early as this fall, because the FDA is slated to make its decision on whether to approve Repatha on Aug. 27.
In clinical trials, Repatha patients enjoyed a 61% reduction in bad-cholesterol levels versus statins alone. If those results are good enough to lead to an FDA approval, analysts think Repatha can split the market for PCSK9 drugs with Praluent.
Since Amgen developed Repatha alone, it won't have to share any profit it makes on the drug, but Repatha may have a tough time moving the needle for Amgen, given that Amgen's sales total roughly $20 billion a year.
Regardless, if Repatha succeeds, its sales could help offset the risk of falling sales tied to patent expiration on Amgen's top-selling blockbusters Neupogen and Epogen. Both of those drugs could lose market share to biosimilar competition in the coming year, so Repatha, along with Amgen's planned cost-cutting and a rich pipeline of potential new therapies, might make this big-cap stock worth a look.
No. 3: Esperion Therapeutics (NASDAQ:ESPR) -- ETC-1002
While Regeneron and Amgen already have cholesterol-fighting medicines awaiting FDA approval, Esperion Therapeutics is only now kicking off phase 3 studies of ETC-1002.
ETC-1002 isn't a PCSK9 inhibitor like Praluent and Repatha, but it still works differently from statins. While statins cut cholesterol production by targeting the HMG-CoA reductase enzyme, ETC-1002 limits the production of a substrate necessary to form cholesterol, while also helping the body synthesize more cholesterol.
In phase 2 trials, cholesterol levels in patients taking the 120 mg dose of ETC-1002 fell by 17% from baseline, and that increased to 24% in patients taking the 180 mg dose. That was significantly better than the placebo group, where bad cholesterol levels fell 4%.
Although those numbers may not seem to be as good as the PCSK9 inhibitors, investors should remember that differences in trial design can affect findings, making direct comparisons risky. For that reason, ETC-1002, which is dosed orally rather than injected, could still have billion-dollar blockbuster potential, especially if the drug can put up solid phase 3 efficacy and safety results.
None of these drugs has gotten an FDA approval, so they all come with risk. There's no guarantee that Regeneron's Praluent or Amgen's Repatha will get the FDA nod on their respective decision dates, so investors will need to keep a close eye on news out of the FDA.
Esperion may be an even bigger gamble, because it still needs to navigate phase 3 trials and it doesn't have any product revenue to blunt a trial failure. That suggests that investors will need to do a bit more due diligence before deciding whether these companies are right for portfolios, but given the potential for these drugs, it would seem that each is an intriguing option that investors ought to keep in mind.