Why Regeneron’s down on a positive FDA recommendation

A panel of outside advisors to the Food and Drug Administration on Tuesday recommended approval of a new cholesterol drug from Regeneron and Sanofi called Praluent. It could be among the first medicines to treat high cholesterol in a new way in decades, and some analysts estimate it will draw peak annual sales of $5 billion. Yet Regeneron's stock sank 4 percent Wednesday. What gives?

Thirteen members of the panel said Praluent's benefits outweigh its risks enough to support approval in one or more patient populations. However, three panel members voted no.

The rub came in the discussion of which patient populations are appropriate for approval. Many panelists supported the drug for a smaller group of patients with genetically driven high cholesterol. Some supported approval for people still at high risk of heart attack and stroke despite best available therapy, often commonly used drugs called statins, like Pfizer's Lipitor. The panel was more cautious on a group of patients who can't tolerate statins, seemingly in part because of uncertainty as to how to define that group.

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At issue was the fact that studies showing how well the medicine reduces the risk of heart attack and stroke as a result of its ability to drastically lower bad, or LDL, cholesterol, have yet to report results. Those are expected in 2017.

"I think we really want outcomes results" before recommending approval in broader patient populations, one panelist said.

"I no longer think we're in an LDL-surrogate era," said another, citing the idea that lowering LDL cholesterol will reliably lead to a lower risk of heart attack and stroke.

Another panelist, William Hiatt of the University of Colorado School of Medicine, said he would have voted yes if the FDA had the ability to grant conditional approval based on the results of the cardiovascular outcomes studies, and withdraw the drug's approval if the outcomes studies didn't support it, under a process known as accelerated approval.

"If this had been an accelerated approval vote, it would have been a yes, but it wasn't," Hiatt said. He voted no.

Steven Nissen, an influential cardiologist and chairman of the department of cardiovascular medicine at the Cleveland Clinic, said the committee missed the mark.

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"I am somebody who generally is opposed to approving drugs on the basis of surrogate endpoints without the outcome data," Nissen said by telephone Wednesday, referring to lowering of LDL cholesterol already shown by the medicine. "However, in this case, I actually support approval and I actually think the concerns of the committee are not on target."

One worry is that once a drug is approved commercially, it could be difficult to run placebo-controlled trials where patients may be concerned they won't get the active medicine. Nissen said that shouldn't be a concern here because enrollment in the studies is already underway, or in one case, complete.

Regeneron and Sanofi's competitor, Amgen, announced Tuesday its trial assessing cardiovascular effects of the drug in 27,500 patients had been fully enrolled.

Amgen's medicine, Repatha, is being discussed Wednesday by the panel.

The company may have a leg up on its competition given Amgen looks to be about six months ahead of Regeneron on enrollment, said Deutsche Bank analyst Robyn Karnauskas.

Beyond concerns about the feasibility of conducting the trials, the drugmakers are incented to complete them in order to secure better reimbursement for the medicines, Nissen said.

Analysts estimate they may cost $10,000 per year, as new, branded, biologic drugs given by injection. By contrast, statins are in many cases generic, and given by pill. Already pharmacy benefits managers like Express Scripts and CVS Health have raised red flags about the new medicines' costs.

But most importantly, Nissen said, are the effects the drugs could have on public health. He said he's confident the medicines, known as PCSK9 inhibitors, will have a major impact on cardiovascular disease, given their mechanism is well understood, and noted the safety profile looks clean.

"Keeping these drugs from the market and denying patients who have this much need access to a really innovative and powerful class of drugs for three or four more years is just not in the public interest," Nissen said. "It's important to understand these drugs are not being used to treat skin rashes, they're being used to treat the leading cause of death amongst men and women in the U.S. and most developed countries."

The drugs are expected to be approved by the FDA this summer. The regulator often follows the advice of its outside panel, but doesn't have to. A vote on Amgen's medicine is expected late afternoon Wednesday.