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Monday, June 9, 2014

RE: thestreet.com's recent article on AEGR

RE:  thestreet.com's article: "Aegerion Stock May See a Resurgence After Hitting Bottom From Ongoing Controveries"

Mr. Spiro: "Estimating the patient population for a rare disease can get tricky."

Which is true and a very good reason for using the most credible sources and facts
that you can find.

On the one hand, the very scientists working on Aegerion's drug have said that there are 300 relevant patients in the US. Nobel Prize winners have said the same. On the other hand, the CEO -- when speaking to investors -- has claimed that there can be 3,000. Who should we believe? And why?

Mr. Spiro: "The stock has plummeted because investors believe Aegerion won't be able to find enough HoFH patients to treat with Juxtapid to reach profitability. I disagree. By the end of 2013, Aegerion was treating 467 patients globally, worth a little over $48.5 million in revenue."

This ignores a glaring possibility. Of those 467 global patients 430 were said to be in the US: "We ended 2013 with over 430 net revenue U.S. patients on therapy, and 37 ex-U.S. net revenue patients on therapy" ~ From "Aegerion Pharmaceuticals Announces Fourth-Quarter and Full-Year 2013 Financial Results"

If the Aegerion science team and the Nobel Prize winners are correct, then the CEO's proactive reach for greater than 300 US patients would present a risk of off-label marketing.

There must be a reason for the DOJ investigation into Aegerion's marketing practices. What could it be? How does this all add up?

The FDA warning is mentioned in Mr. Spiro's article, so why not the DOJ investigation? (or even the Brazilian investigation?) A CNBC report by Dan Mangan mentioned that the DOJ and the FDA issues are probably separate matters. As Aegerion's Investor Rep put it: "I want to be sure you are clear though that we're not certain that the subpoena is related to Marc's statements on 'Fast Money,' and in fact, we believe it likely isn't." ~ CNBC 'Fast Money' faux pas: Firm draws FDA warning, DOJ subpoena  

If the scientists working on Aegerion's drug are correct that there are only 300 US patients, then given the sales results thus far, the more patients that AEGR proactively markets to, the greater the risk of an off-label marketing violation.  This may explain the current DOJ investigation into Aegerion's marketing practices.

Mr. Spiro: "Juxtapid is now approved in Europe and the company's commercial rollout there is well underway."

"… the rollout is well underway." ?? How much revenue is coming in from Europe?
Aegerion's CEO says that Europe "remains a challenging market for establishing reimbursement. Our strategy is to keep European operating expenses low until we have received reimbursement and pricing approvals in each country. We believe that the majority of our revenue in 2014 will still come from the U.S., and to a lesser extent from non-European x U.S. markets, primarily Brazil."

"So when we adjusted our guidance, it was tied really to the slower orders in Brazil and nothing to do with this glitch in Germany. It's just -- we thought even if we succeeded on reimbursement in Germany, the European market is going to be a slower-growing market. They just have, I think, a governor on the growth of orphan products across Europe because of the financial situation in Europe and we had forecasted. That's why we're investing slower and more carefully in all European countries until we get these reimbursements approved."  ~ Q1 2014 CC


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