UPDATED: Sanofi and Regeneron pick up a blockbuster cardio approval--with a catch

Sanofi ($SNY) and Regeneron ($REGN) won an expected FDA approval for the first of a new class of cholesterol drugs expected to alter the landscape in cardiology, but regulators stopped short of giving the treatment the wide label its makers wanted.

The agency cleared Praluent, developed as alirocumab, which is an injected antibody that blocks the protein PCSK9 and thereby helps the body clear excess LDL, or bad, cholesterol from the blood. The treatment, invented by Regeneron, is now approved for use alongside generic statin therapy for patients with cardiovascular disease who need more help getting their cholesterol under control, including sufferers of a rare genetic disorder called familial hypercholesterolemia.

But the FDA, at the behest of its independent advisers, didn't indicate Praluent for so-called statin-intolerant patients. Experts have long questioned the scientific merits of statin intolerance, and, in a panel discussion last month, the agency's go-to group of cardiologists worried that approving PCSK9 blockers for that population could lead to overuse of therapies that are yet to prove their long-term worth.

With the nod, Sanofi and Regeneron are in place to launch the U.S.'s first PCSK9 treatment, trailed by Amgen ($AMGN), whose Repatha (evolocumab) is expected to win approval by Aug. 27, and Pfizer ($PFE), whose bococizumab is still in late-stage development. Each therapy has the potential to bring in as much as $3 billion a year at its peak, analysts have said, but such lofty projections will hinge on pricing and success in some ongoing outcomes trials.

Sanofi plans to charge $40 a day for Praluent, working out to more than $14,000 a year at wholesale price. That's above analyst estimates of between $7,000 and $12,000, though actual costs to patients will likely be lower due to rebates and discounts provided to patients and insurers, the company notes.

As for long-term efficacy, while Praluent and its ilk have proven themselves broadly effective in beating back bad cholesterol by as much as 60% in clinical trials, it remains to be seen whether doing so translates to improved rates of heart attack, stroke and cardiovascular death. Each of the PCSK9 contenders is running a long-term outcomes trial in hopes of establishing that link, but data from those studies won't be available until next year at the earliest. Until then, payers and physicians may hold off on widely adopting the new treatments, which are sure to cost considerably more than generic statin therapies.

The race to cash in on PCSK9's potential has largely centered on Praluent and Repatha. Amgen struck first with a European approval earlier this week, but Sanofi and Regeneron managed to leapfrog the Big Biotech in the U.S. by buying a voucher for a truncated FDA review. Praluent secured a positive recommendation from European regulators Friday and is expected to win a full continental approval in the next two or three months. Notably, unlike their U.S. counterparts, European authorities OKed the treatments for use in statin-intolerant patients.

Now, each company is expected to mount a major promotional push to get its new therapy off the ground and onto the market, but the PCSK9 class is likely to face pushback on price from payers. Express Scripts ($ESRX), the nation's largest benefits manager, has said that it sees the new therapies as essentially interchangeable, putting it in a position to bargain for discounts, much as it did earlier this year in hepatitis C.

- read the announcement

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