Source: Aegerion Pharmaceuticals

What: After reporting third quarter financials and indicating that new competitors were impacting prescription volume trends, shares in Aegerion Pharmaceuticals (NASDAQ: AEGR) have tumbled 23% so far today.

So what: Investors focusing only on the headline top and bottom line numbers might think all was rosy at Aegerion Pharmaceuticals last quarter, but that isn't the case.

Sales of Juxtapid, a therapy for genetically caused high cholesterol, surged 34.6% year-over-year to $58.8 million in the quarter. That led to Aegerion's total revenue rising 54% to $67.3 million and its non-GAAP EPS climbing to $0.20 from $0.12 last year.

However, the FDA approval this past summer of a new class of cholesterol-busting drugs that inhibit the PCSK9 protein are beginning to weigh down demand for Juxtapid.

In July, the FDA gave Regeneron (REGN 0.03%) the go-ahead to begin marketing Praluent in tough-to-treat cases of high cholesterol and in August, the agency followed up that approval with the approval of Amgen's (AMGN -0.14%) Repatha, another PCSK9 therapy.

Because Praluent and Repatha hit the market with prices near $14,000 per year, and Juxtapid is an ultra-expensive medication with a price of about $360,000 per year, it's little wonder that Aegerion reports that some of its patients are switching to competitors' drugs.

Now what: Decelerating demand tied to Regeneron and Amgen's new drugs isn't unexpected, but that's little comfort to Aegerion shareholders.

Aegerion's management reports that new patient starts on Juxtapid have slowed since Praluent and Repatha's approval and that roughly half of patients that discontinued Juxtapid last quarter did so in order to transition to PCSK9s.

Those trends shouldn't be ignored by investors because they're likely to accelerate as Regeneron and Amgen's sales forces make inroads with doctors and Praluent and Repatha get preferential treatment to Juxtapid on insurance company drug formularies.

In order to blunt the risk from PCSK9s, Aegerion acquired Myalelpt earlier this year, but Myalept's sales are still small at just $8.5 million in Q3, up from $7.1 million in Q2. Aegerion also plans studies evaluating the use of Juxtapid alongside PCSK9s and it's working on a next-generation variation of Juxtapid that may have fewer side effects. However, I don't see enough potential in their plans to offset the risk associated with Juxtapid's sales uncertainty. For that reason, I'm not interested in picking up Aegerion's shares on this drop.