By Andrew McDonald, Ph.D., and Ning Yang
Previously, we published a note on Aegerion Pharmaceuticals (AEGR) on June 8, 2012 that discussed the merits and potential of its leading drug candidate, lomitapide, as well as the stock. We have since followed up that note with a survey of the lipidologists who belong in our proprietary Expert Network on their potential use of lomitapide and their competitor's product mipomersen, from Isis Pharmaceuticals, Inc. (ISIS) and partner sanofi-aventis (SNY).
Lomitapide has a December 29, 2012, PDUFA date and mipromersen has a January 29, 2013, PDUFA date. The full results of our lipidologist survey can be downloaded at no cost from the LifeSci Advisors website here. These drugs are currently under review by the FDA for the treatment of patients with Homozygous Familial Hypercholesterolemia (HoFH) or "uncontrollably" high cholesterol levels. We conducted the survey to get a better understanding of the market size of this orphan indication and to make better potential sales estimates.
A total of 43 lipidologists, of 598 solicited, responded to our survey, four of whom do not treat patients with uncontrollable LDL levels. The 39 lipidologists who responded to our survey treat a total of 995 patients with uncontrollably high LDL levels, equating to a median of 10 (mean of 25.5) patients per responder. Of these 995 patients, a total of 177 have documented HoFH, equating to a median of 0.5 (mean of 4.7) per lipidologist. Respondents view lomitapide as more efficacious, with a better safety profile, than mipomersen. Consequently, there is more interest in the use of lomitapide over mipomersen. Each survey responder intends to prescribe a median of 2.5 patients lomitapide and a median of 1 patient mipomersen, should both drugs gain approval.
For our estimates, we assume that there are 598 lipidologists in the United States (that is how many we have in our Expert Network) and that 9.3% do not treat uncontrollable LDL patients (4 of 43 responders do not treat these type of patients). This gives us 542 lipidologists, who we assume will treat a median of 2.5 patients with lomitapide and 1 patient with mipomersen, per the survey results. Thus, we estimate a total of 1,356 patients will be prescribed lomitapide and 542 patients will be prescribed mipomersen in the United States. This new data reinforces our view that Aegerion's stock is currently undervalued and should increase substantially as the company gains FDA approval and has a strong launch.
We found that the awareness of lomitapide and mipomersen is relatively high among the 39 responders, with 23% reporting being very familiar with lomitapide, compared with 31% for mipomersen; and 64% reporting being somewhat familiar with lomitapide, compared with 46% for mipomersen. Only 13% reported not being familiar with lomitapide, compared with 21% for mipomersen. The respondents view lomitapide as more efficacious than mipomersen—44% view lomitapide as very efficacious, compared with 13% for mipomersen; 51% view lomitapide as moderately efficacious, compared with 74% for mipomersen; 5% view lomitapide as minimally efficacious, compared with 13% for mipomersen.
Regarding safety, only 3% of the respondents consider lomitapide very safe, compared with 5% for mipomersen. 62% consider lomitapide moderately safe, compared with 41% for mipomersen. 36% consider lomitapide questionably safe, compared with 54% for mipomersen. A requirement for liver monitoring and concerns over fatty liver would limit these drugs' use as reported by 23% of the respondents. 54% responders reported that the use of both agents would be somewhat limited due to these concerns, and 23% report that these issues would not pose a limitation on their use.
With respect to LDL apheresis, 20 of 39 (51%) lipidologists have at least one patient undergoing this treatment. While each lipidologist has a median of 1 (mean of 2.7) patient on LDL apheresis, 55 of the 99 (56%) total patients on apheresis are treated at three sites. We estimated that only 10% of all uncontrollably-high-LDL-level patients are being treated using LDL apheresis, which is a highly cumbersome treatment that is carried out at only a few centers in the United States. This statistic suggests that these new drugs address a major unmet medical need.
Should both lomitapide and mipomersen gain FDA approval, the 39 responding lipidologists intend to prescribe a total of 254 patients lomitapide and a total of 152 patients mipomersen, equating to 26% and 15% of their total uncontrollably-high-LDL-level patients, respectively.
Due to relatively high variability among the respondents (i.e. large difference between mean and median), we opted to use median numbers—which are more conservative than mean numbers—in our market penetration estimations. At a treatment cost, which we estimate at $300k per patient per year for lomitapide, this drug would generate revenue of $407MM in the US alone, assuming that a total of 1356 patients are put on lomitapide. If you put a conservative six multiple net sales of $366MM (assumes maximum 10% royalty payment to the University of Pennsylvania), you get a $2.2B value for just US sales.
Post the financing announced June 14, Aegerion has approximately 25.0MM shares outstanding (21.6MM as of May 1 + 3.4MM from financing) and a pro rata cash balance of approximately $100MM ($63.5 as of March 31 + $47.3 from financing - ~$10MM from anticipated 2Q12 burn). This gives the company an enterprise value of $280MM. The current enterprise value is 7.6x lower than the projected value of just lomitapide's US sales potential value of $2.2B.
Furthermore, lomitapide is a wholly owned asset, making Aegerion a likely acquisition candidate, particularly by orphan indication players such as BioMarin Pharmaceutical Inc. (BMRN) and Alexion Pharmaceuticals, Inc. (ALXN). Hence, we strongly believe there is tremendous upside to the stock pending the FDA approval and a strong launch. In conclusion, these survey results strongly support our overall assessment of lomitapide and our bullish outlook on the stock.