Source: Regeneron Pharmaceuticals

The FDA advisory committee responsible for reviewing Regeneron Pharmaceuticals (NASDAQ:REGN) and Sanofi SA's (NASDAQ:SNY) Praluent filing for approval has given the drug a thumbs up, helping clear the way for possible official green-light when the FDA makes its official go-no-go decision on July 24.

If the FDA follows the committee's guidance (and it usually does), then it could kick-off a new era in treating high cholesterol, but what might that mean to Regeneron and its investors? Let's learn a bit more about the drug and how the market opportunity could move the needle for this biotech stock.

First, a little bit of background
Cardiovascular disease is the leading cause of death in the United States. Every year, more than 700,000 Americans die of heart disease, which means that heart disease represents about 1 in every 3 deaths.

Those numbers are staggering, particularly given that despite doctors' best efforts, the major causes of cardiovascular disease remain unchecked.

High cholesterol levels, a risk factor for heart disease, have led to tens of millions of patients being prescribed cholesterol busting medicines, known as statins, to help keep cholesterol from causing life threatening cardiovascular events, such as heart attack and stroke.

According to the nation's biggest pharmacy benefit manager, Express Scripts, roughly 71 million Americans suffer from high blood cholesterol levels that could eventually result in one form or another of cardiovascular disease -- and that suggests that there's a significant need for new treatment approaches like Praluent.

Big money at stake
The estimated annual total cost of treating heart attacks, stroke, and other cardiovascular disease is north of $300 billion, and the treatment market for controlling cholesterol levels with statins accounted for more than 10% of that spending, or $40.2 billion per year, at its height.

Today, the statin market is dominated by generic formulations of Lipitor, a Pfizer drug that was once the planet's top-selling therapy, generating a staggering $12 billion in annual sales.

Express Scripts reports that generic Lipitor accounts for 80% of all statin prescriptions written last year.

Although an approval of Praluent is most likely to be awarded in a narrower population of high cholesterol patients than Lipitor, millions of patients could still be initially eligible for Praluent co-therapy alongside statins, or as a monotherapy without statins if statins aren't effectively controlling cholesterol levels.

Overall, about 34 million Americans are being treated for their high cholesterol levels; however, roughly a third of those patients don't have their cholesterol levels under control.

Capturing the opportunity
Regeneron's Praluent works differently than statins do. Rather than decreasing cholesterol production in the liver, Praluent increases the number of cholesterol receptors responsible for removing cholesterol from the bloodstream in the liver. Since Praluent has a different mechanism of action than statins, Praluent is likely to be predominately used alongside them.

If that proves to be the case, then the market for Praluent could be worth billions of dollars in sales per year to Regeneron. Since Express Scripts speculates that PCSK9 inhibitors like Praluent could fetch as much as $10,000 per year, it wouldn't take many of the 11 million people who are inadequately controlled by statin therapy to turn Praluent into a multi billion per year blockbuster.

Looking ahead
An approval would seem to indicate that Regeneron has a good chance of a blockbuster drug on its hands, but investors should remember that Regeneron will have to split Praluent's success with Sanofi.

Regeneron and Sanofi's licensing deal splits profit from Praluent in the U.S. equally between the two companies, and it also requires splitting profit from overseas sales on a sliding scale that begins with Sanofi's receiving 65% and Regeneron receiving 35%.

Regardless, since Regeneron's total revenue was less than $3 billion last year, an approval and successful launch of Praluent could result in the company's sales, and profit, heading considerably higher, and for that reason Regeneron may be a company that investors ought to consider owning.