Aegerion Pharmaceuticals has been in the news for all the wrong reasons of late. The launch of its rare disease drug, lomitapide (Juxtapid), has stalled. The company is worth less than a third of what it was last year. Today the Cambridge, MA-based company is trying to turn the conversation elsewhere—to an FDA-approved rare disease drug it is acquiring from pharma giant AstraZeneca.
Aegerion (NASDAQ: AEGR) is paying AstraZeneca $325 million in cash up front to acquire and commercialize metreleptin (Myalept), an injectable drug for generalized lipodystrophy. This ultra-rare condition, characterized by the loss of fat tissue, can lead to a number of severe metabolic disorders, like high triglyceride levels or an inability to break down sugar. The condition is caused by a deficiency of leptin, a hormone that helps regulate appetite, energy expenditure, and the amount of fat stored in the body. Metreleptin is a recombinant form of that hormone.
The drug has been passed around a bit. It was first owned by Amylin Pharmaceuticals, which was developing it as a treatment for obesity and high triglycerides or diabetes in patients with lipodystrophy. Amylin was bought by Bristol-Myers Squibb and AstraZeneca a few years ago (Bristol later divested its stake), and AstraZeneca eventually won FDA approval of the drug in the U.S. in February.
The drug, however, was given a limited label. It’s only approved for complications of general lipodystrophy (“general” referring to a complete loss of fat tissue)—a patient group Aegerion executives calculated as one in a million—partially due to safety concerns.
Nonetheless, buying metreleptin gives Aegerion a chance to diversify beyond its only other drug, lomitapide, a treatment for a rare genetic form of very high cholesterol, and tell a different story to investors. The company’s share price has fallen precipitously over the past year or so, because lomitapide hasn’t lived up to expectations, and competition is looming from a group of drugs from Amgen and Sanofi/Regeneron Pharmaceuticals. Aegerion recently significantly lowered its financial projections for the year, from $180 million-$200 million in sales to $150 million-$160 million. The company was worth close to $90 a share in July 2013; it’s now worth just over $20. CEO Marc Beer was also named in allegations of illegal drug use in the messy divorce proceedings between Jefferies & Co. banker Sage Kelly and his wife (Beer has denied the allegations).
In need of another revenue stream, Aegerion picked up metreleptin. On a conference call with analysts, Aegerion executives projected the drug could generate somewhere between $200 million and $250 million in peak net sales. Those assumptions were based on Aegerion winning approval of metreleptin in Europe, commercializing it in a number of countries, adding an additional indication to its label for patients with a partial loss of fat tissue and severe complications, and hiking up the price of the drug, which currently costs $325,000 per patient, per year. Beer didn’t specify just how much of a price increase Aegerion is contemplating, but said that the company will provide more details on its launch plans and pricing strategy once the deal closes in early January.
Still, there are big questions as to the drug’s potential. Aegerion executives said on the conference call that the company plans to file for approval in Europe based on the drug’s existing data; but neither Amylin nor AstraZeneca were able to do so. Also, while Aegerion aims to expand the market for the drug to included patients partial loss of fat tissue, the FDA didn’t previously approve the drug for that indication because it didn’t feel that safety and efficacy for those patients been satisfactorily demonstrated in clinical trials. (“It’s something we’ll have to demonstrate prospectively,” said chief medical officer Mark Sumeray.)
But at minimum, Aegerion’s investors will no longer just be talking about lomitapide.
“We’re really excited about this critical milestone,” Beer said on the call. “Aegerion, with the close of this transaction, will become a two-product company.”
Aegerion shares were up 11 percent in early trading on Thursday.