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Wednesday, November 13, 2013

AEGR's addressable market, founder effect, and the Danish study

Disclosure: After investigation, I believe that AEGR is grossly overvalued, that its addressable market has been exaggerated by 1,000%, and that its regulatory risks are not yet reflected in the stock price. Consequently, I am short AEGR. I am not infallible. All claims and references herein should be verified by the reader. All investors must do their own due diligence.  This report is not a recommendation.


AEGR's addressable market, founder effect, and the Danish study

There are two “levers” behind the diverse prevalence rates that are published for FH: Where one searches, and How one searches.

Where one looks for FH patients will sometimes determine what prevalence rate one finds.

The study actually does not claim a prevalence rate for the whole world, or one that can be extrapolated to the US population. (For the original article and additional treatment of this topic, see: “Estimates of Aegerion’s addressable market at odds by 1,000%.” )

Estimates are shown for the theoretical frequency of heterozygous familial hypercholesterolaemia of 1/500 in the general population,1 as well as for the directly detected frequency of 1/200 in the Danish population, a typical country in Northern Europe.”[1]

So we are showing a study for Northern Europe, while acknowledging a prevalence rate for 1:500 for the “general population.”  And what do they mean by “a typical country in Northern Europe” when we read the source in greater detail that “all were whites of Danish descent”?  How do we extrapolate from that restrictive sample to a general prevalence rate as promoted on Aegerion’s Investor Day?

There is an interesting phenomenon known as the “founders effect,” where the prevalence rate of inherited traits, including genetic diseases, often increases or decreases out of proportion to the general population, as small groups move into isolation and then later grow their populations while still remaining relatively isolated. This means that certain isolated populations, Lebanese Christians, to cite a famous example, can have a much higher prevalence rate for HeFH and HoFH than the general population. Not all isolated groups have been studied for HoFH prevalence.  Iceland and Finland however have been identified as cultures where “founders effect” is present.

Such founder effects are thought to influence the spectrum of FH mutations in French Canadians; South African Afrikaners, Jews, and Indians; Tunisians; Christian Lebanese; Icelanders; and Finns[2]

Now Denmark is neither Iceland nor Finland, however if there were a spectrum with “Isolated Culture” designated on one end and “Melting Pot” on the other end, would we see Denmark closer to Iceland and Finland or to the US and Germany? The USA is more of a melting pot than Denmark, to say the least. (See the chart below for US Demographics.[3])

“1 in every five international immigrants lives in the United States of America.” United Nations International Immigration Wall chart[4]

But we need not concern ourselves too much with a comparison of ancestries and cultural mix of Denmark, since the study itself was limited to those who “were all whites of Danish descent.” From the original study

“Individuals were selected from the national Danish Civil Registration System to reflect the adult Danish population aged 20–100 yr and were all whites of Danish descent.”[5]

This is the source behind the European Heart Journal’s paper promoted on Aegerion’s Investor Day.  What does this mean? Aegerion extrapolated data from “white Danish descendants” to estimate prevalence in the melting pot known as the USA.

How one identifies FH patients determines what prevalence rate one will find.

A single methodology used to identify HoFH or HeFH patients has not been established.  In fact the study which Aegerion funded and was promoting on Investor Day, actually “proposes recommendations on how better to diagnose individuals and families with FH …” It recommends the Dutch Lipid Clinic Network Criteria (DLCN)-- a scoring system which categorizes cases as “Definite,” “Probable,” “Possible,” and “Unlikely.”  It then lumps the Definite and Probable cases and shows a higher prevalence rate. 

“The DLCN criteria are recommended in order to establish the clinical diagnosis of FH.”[6]

By lumping “Probable” cases with “Definite” cases we will naturally arrive at a higher prevalence rate.

A ‘definite FH’ diagnosis can be made if the subject scores .8 points. A ‘probable FH’ diagnosis can be made if the subject scores 6 to 8 points. A ‘possible FH’ diagnosis can be made if the subject scores 3 to 5 points. An ‘unlikely FH’ diagnosis can be made if the subject scores 0 to 2 points. Note the study included not only Definite FH patients, but also Probable.[7]

Should we be at all surprised that both studies received funds from players in the Pharmaceutical Industry who have a financial interest in finding a larger pool of HeFH patients? 

From an article written by Michael O'Riordan about the paper:

On the whole, the timing of the EAS consensus statement, which corresponds with the recent availability of these new drugs, might give some physicians reason to be skeptical.[8]

It wasn’t just a study of prevalence rates, it was the promotion of a particular method of screening patients. Most significantly, it was a scoring system that categorized FH candidates as Definite, Probable, Possible, and Unlikely. The data presented in the European Heart Journal lumped the Definite and Probable together, concluding a prevalence of 1:200.  The original paper, from which the European paper derived its numbers, shows that the Definite FH patients concurs with the standard prevalence rate of 1:500.

This is not to say that the study was falsified or is in error just because incentives are involved. That would be a failure in logic. It is only to say that of all the studies that could have been performed and presented, this particular group with this particular method was funded by the pharmaceutical industry and made available to us.  The full debate between contrasting viewpoints has not yet taken place.  At this point, anyone who does not break from the guided tour might be misled into thinking that a responsible conclusion has been made.  

Different incentives different selections, different presentations.

This was Investor Day.  Did we really expect balanced data and the inclusion of the conflicting studies of the HeFH prevalence? One Danish study suggests a prevalence of 1:950, another 1:200.

It was Investor Day. Why would we see Aegerion’s funded study on the German population of FH patients next to that of the “white Danish descendants.” The German study, also funded by Aegerion, served its purpose: which was to show that HoFH was so rare that it deserved orphan status. 

Incentives? When in need of regulatory approval for an orphan product, one needs the number of patients to be as small as possible.

“Conclusion: The estimated frequency of homozygous familial hypercho­lesterolemia patients in Germany is around 95 (1:860,000) and the disease should hence be recognized as a rare one according to the definition of the European Medical Agency.”[9]

After approval, when in need of promotional material for investors, one needs the patient population to be as large as possible. 

“HofH: 1:160,000 yields > 2,000 HoFH US Patients (extrapolation).”[10]

Before approval Dr. Cuchel who led Aegerion’s phase 3 study used 1:1,000,000.  In the FDA committee meeting Dr. Rader, “inventor on Aegerion’s patent,” also uses 1:1,000,000.

1:860,000 for Germany, 1:1,000,000 for the USA and then 1:160,000 for Denmark -- the difference between estimates pre- and post-approval expands to a multiple of 5

What some think should be done, does not have the same risk profile as What is already being done.

Probability of social change versus the inertia of how things already are: Here’s another interesting contrast to these two papers which were both funded by Aegerion.  The Danish study recommends that the medical community adopt a particular method. The German paper was a tally of existing patients, that is, it did not represent what Doctor’s should be doing but what in fact they are doing. As an investment, the probability that the pharmaceutical industry can change how doctors will screen for FH in the future is very different from the probability that doctors will continue doing what they are already doing.

The German method is also more likely to have a real bearing on how many HoFH patients can actually be found. A theoretical scoring system working with a data base is going to find more “cases” than an empirical method of actually locating real patients.  But Aegerion will not be selling lomitapide to tally marks in a research paper. It needs to find real people, through real doctors, and according to what those Doctors are in fact doing.

[1] Figure 3, Familial hypercholesterolaemia is underdiagnosed and undertreated in the general population: guidance for clinicians to prevent coronary heart disease. (cited by Aegerion on Investor Day)
[2] Genetic Causes of Monogenic Heterozygous Familial Hypercholesterolemia: A HuGE Prevalence Review, Melissa A. Austin, et al.
[5] Familial Hypercholesterolemia in the Danish General Population: Prevalence, Coronary Artery Disease, and Cholesterol-Lowering Medication
[6] Familial hypercholesterolaemia is underdiagnosed and undertreated in the general population: guidance for clinicians to prevent coronary heart disease. (cited by Aegerion on Investor Day)
[7] Familial hypercholesterolaemia is underdiagnosed and undertreated in the general population: guidance for clinicians to prevent coronary heart disease. (cited by Aegerion on Investor Day)
[9] Homozygous familial hypercholesterolemia (HoFH) in Germany: an epidemiological survey  (Aegerion provided funding for this study.)
[10] Slide 84 from Aegerion Investor day presentation

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