Regeneron Pharmaceuticals - Long-Term Investors take Note!

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Value investors looking for companies that have the potential for long-term growth might take a look at Regeneron Pharmaceuticals (NASDAQ: REGN). With the development of its anti-PCSK9 drug REGN727, this company may continue to increase in value as research shows incredible potential for this drug in the anti-cholesterol market.

For a Quick Education on Cholesterol

We have a gene that has been named PCSK9. Mutations in this gene cause severe elevations in total cholesterol and low-density lipoprotein cholesterol (LDL). Remember that bad cholesterol? This is the one! It is used to transport cholesterol from the liver to tissues throughout the body. It can build up on the walls of your arteries, and is the main source of plaque buildup. The more LDL you have in your blood, the greater your risk of heart disease.

Statins like Lipitor manufactured by Pfizer (NYSE: PFE) and the new generic form Atrovastatin have worked for the last 30 years but two problems exist. Statins have some adverse side affects and there is a population that cannot use them. This new drug provides an alternative.

Regeneron’s First Study shows Great Promise

Regeneron, in conjunction with the French drug maker Sanofi SA (NYSE: SNY), has been developing REGN727. These are the results of its initial study:

  • The drug targets the PCSK9 gene.
  • Has shown to lower cholesterol by 72%.
  • Significantly lowered LDL levels.
  • No discontinuations were needed during the study because of adverse events.

What does this mean for Regeneron Pharmaceutical?

There is a great market for this class of drugs. The anti-PCSK9 drugs could fetch $8 billion to $25 billion a year in sales, depending on pricing and how widely they are prescribed. The market may include:

  • The sickest patients who have had a heart attack or are at higher risk.
  • Those for whom statins show minimal results. This could be up to 40% of present users.
  • Nine million Americans (alone) are deemed at high or very high risk of heart-related problems, and could benefit most from PCSK9 drugs added to statins.
  • A million people cannot use statins. They also could benefit.

Regeneron plans to begin Phase II, a number of large late-stage trials of REGN 727, by mid-2012. REGN727 could generate huge sales if it succeeds in larger trials and remains free of serious safety concerns. This will also mean large revenue for the company. This is a company with looking at for the long-term growth investor. 


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