Aegerion: 2012 Was A Great Year But 2013 Could Be Better

| About: Novelion Therapeutics, (NVLN)
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What could be a better culmination of 2012 for Aegerion Pharmaceuticals (AEGR) than the U.S. Food and Drug Administration (FDA) approval of Juxtapid (lomitapide) in December? Bristol-Myers Squibb (BMY) originally developed lomitapide as a high cholesterol drug, but gave up on it when a trial had a high patient dropout rate due to liver damage and gastrointestinal side effects. Development of the drug was eventually handed over to Aegerion.


On December 21, the FDA voted 13 to 2 to approve Juxtapid as an adjunct to a low-fat diet and other lipid-lowering treatments in patients with homozygous familial hypercholesterolemia (HoFH).

HoFH is a severe, rare, inherited condition that makes the body unable to remove LDL cholesterol, often called the "bad" cholesterol, from the blood, causing abnormally high levels of circulating LDL cholesterol. Health problems often occur early in life. In severe cases, death from a heart attack may occur in the first few years of life. For those with HoFH, heart attacks and death often occur before age 30. While the FDA states that the disease has been reported at the rate of about one in one mil­lion people in the United States (which equates to about 315 people), other HoFH incidence estimates range between 300 to 3,000 people.

Juxtapid works by impairing the creation of the lipid particles that ultimately cause an increase in LDL. Juxtapid is a capsule taken once a day, without food, and at least two hours after the evening meal. Patients should take supplements that contain fat-soluble vitamins and essential fatty acids daily while taking Juxtapid.

The safety and effectiveness of Juxtapid were evaluated in a clinical trial consisting of 29 HoFH patients. On average, levels of LDL cholesterol fell by approximately one-half during the first 26 weeks among those who tolerated the drug.

Juxtapid carries a "Boxed Warning" regarding a serious risk of liver toxicity because it is associated with liver enzyme abnormalities and accumulation of fat in the liver, which could potentially lead to progressive liver disease with chronic use. Juxtapid also reduces the absorption of fat-soluble nutrients and interacts with several other medications.

Juxtapid is expected to cost a patient about $200,000 to $300,000 a year.

The FDA is requiring three postmarketing studies for Juxtapid: an animal study to evaluate the potential for toxicity in children and teens; a long-term registry of patients with HoFH treated with Juxtapid to determine the long-term safety; and an enhanced pharmacovigilance program to monitor reports of malignancy, teratogenicity, and hepatic abnormalities.

The most common adverse reactions in the clinical trial included diarrhea, nausea, vomiting, indigestion, and abdominal pain.

"Juxtapid, in addition to diet changes and other cholesterol-lowering treatments, is a new option for those suffering with HoFH and the serious health consequences resulting from this condition," said Eric Colman, M.D., deputy director of the Division of Metabolism and Endocrinology Products in the FDA's Center for Drug Evaluation and Research.

Aegerion CEO Marc Beer expects 2013 to be a transformational year as the company executes their launch plan and delivers Juxtapid to HoFH patients who need treatment. Aegerion is identifying patients who are potential candidates for therapy, and educating providers about the drug. They also plan to make Juxtapid available on a named patient sale basis in countries where such sales are permitted. Based on these activities, Aegerion expects to end 2013 with approximately 250-300 patients on therapy on a global basis, which should provide the company with a solid base of revenue.

Aegerion is also expanding clinical development of Juxtapid. During the fourth quarter of 2012, Aegerion initiated enrollment of Japanese subjects into a Phase 1 study of the pharmacokinetic and pharmacodynamic properties of Juxtapid. If the study is successful, Aegerion plans to conduct a small therapeutic study of the drug in Japanese HoFH patients in support of a planned filing for marketing authorization in Japan. Aegerion is also conducting studies to determine if Juxtapid is a safe and effective treatment for pediatric patients.

During 2012, Aegerion submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA), requesting approval to market Juxtapid as an adjunct HoFH treatment. Aegerion anticipates an EMA decision in mid-2013. If the application is approved, the company will pursue reimbursement on a country by country basis and anticipates commencing commercial activity in Europe by the end of 2013.

Aegerion ended FY 2012 with approximately $78 million to $83 million in cash and cash equivalents. Aegerion expects global net revenues of $15 million to $25 million for FY 2013 with 250 to 300 patients on Juxtapid therapy by year-end 2013. The company states, "18 months post approval of Juxtapid in the EU, if approved, the Company expects to generate global net revenue at a $100 million annualized run rate and achieve cash flow breakeven from operations."

Continues Catalent Partnership

After a seven year clinical development partnership with Catalent Pharma Solutions, Aegerion announced that they selected Catalent as the exclusive supplier of Juxtapid both U.S. and European markets. Catalent is a private company specializing in development solutions and advanced drug delivery technologies, providing world-wide clinical and commercial supply capabilities for drugs, biologics and consumer health products. Catalent employs approximately 9,000 people, including over 1,000 scientists, at nearly 30 facilities across five continents and generates more than $1.6 billion in annual revenue.


Juxtapid could compete with Kynamro (mipomersen) produced by Genzyme, a Sanofi (NYSE:SNY) company, and Isis Pharmaceuticals (ISIS).

On October 19, 2012, the FDA's Endocrinologic and Metabolic Drugs Advisory Committee voted 9 to 6 recommending that the FDA approve Kynamro for the treatment of HoFH. Although the committee's input will be considered by the FDA, the FDA is not bound by the committee's guidance. The FDA has set a target action date, January 29, 2013, for Kynamro under the Prescription Drug User Fee Act (PDUFA).

An application for marketing approval of Kynamro is also pending in the EU. In December, the European Medicines Agency's Committee for Medicinal Products for Human Use (NASDAQ:CHMP) voted against approving Kynamro due to safety concerns. The CHMP's frcision is not binding on European regulators, buy they consider the committee's opinion when deciding whether to approve a drug. The companies are appealing the CHMP's Kynamro decision.

Kynamro has been linked to benign and malignant tumors. A study found that 3.1% of patients developed tumors in clinical trials, compared to 0.9% of patients treated with a placebo.

Isis has been hit with a class action lawsuit brought by share holders who allege the company hid bad news from investors about the safety of Kynamro. The lawsuit contends investors bought Isis stock based on "false and misleading statements"about the drug's safety record in clinical trials.

Isis shares fell over 20% after the October 18 FDA committee meeting that recommended that the FDA approve Kynamro despite concerns that the drug could cause liver damage and tumors.

The litigation demands that Isis compensate investors for the losses they incurred because they relied on Isis's statements about Kynamro. The suit seeks class action status for those who bought Isis shares between March 21 and October 15, 2012.

Analyst Coverage

Analysts are upbeat about Aegerion.

  • On December 24, 2012, JP Morgan Chase reiterated its Overweight rating for Aegerion, and bumped the company's target price to $30, up from $27.
  • On December 26, Leerink raised their target price to $30, up from $25. Leerink has an Outperform rating on Aegerion.
  • On December 27, Jefferies increased their target price to $29, up from $25. Jefferies has a Buy rating on Aegerion.
  • On January 3, Janney Capital initiated coverage with a Buy rating and a $30 price target.
  • On January 9, Needham and Company raised their price target to $36, up from $30. Canaccord Genuity also put a trice target of $36 on Aegerion, up from $27. Both Needham and Canaccord have a Buy rating on the company.

Conclusion: Buy

Aegerion is a development stage biopharmaceutical company that focuses on therapeutics to treat severe inherited lipid disorders. The company also plans to develop lomitapide for the treatment of adult patients with a severe genetic form of hypertriglyceridemia called familial chylomicronemia. Familial lipoprotein lipase deficiency is a group of rare genetic disorders in which a person lacks a protein needed to break down fat molecules. The disorder causes large amounts of fat to build up in the blood. The disorder is estimated to affect about one person out of one million people.

There is plenty to like about Aegerion. The company is focused and knows where they are going. It's lead drug, lomitapide, is considered by most analysts to be the best in class HoFH drug due to the tumor concerns reported in mipomersin. Mipomersin will be approved or rejected by the FDA on January 29.

The biggest question I have is, "How many people have HoFH?" Estimates range from 300 to 3,000. The drug is purported to cost patients between $200,000 to $300,000, so the U.S. market for the drug could be anywhere from $60 million to $900 million.

What I don't like about Aegerion is that they have only one drug in their pipeline. Whether you are a little investor or a 682M market cap developmental stage biopharmaceutical company, there is always a danger when one puts all of one's eggs in one basket.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.