The Bull Case for PCSK9 (AMGN, SNY, REGN, PFE): Why Estimates Are Too Low

Richard

PCSK9 inhibitors are injectables (biweekly to monthly) that lower LDL (aka ‘bad’) cholesterol by ≥ 50%, on par with max dose statins. AMGN and SNY/REGN are closest to market, followed by PFE

Statin-intolerant patients generally are restricted to the use of bile acid sequestrants or Zetia. At best the sequestrants lower LDL by 25% with substantial GI side effects; Zetia lowers LDL by just 15%. PCSK9’s offer 2x – 3x efficacy to sequestrant patients, and a chance to trade GI side effects for self-injection – in many cases a very fair trade. PCSK9’s offer Zetia patients 3x the efficacy at the cost of self-injection; this is a fair trade to patients at higher near-term risk of atherosclerotic events, but less attractive to many of the rest.  The US statin-intolerant market accounts for roughly 19M months of treatment annually; we believe PCSK9’s can capture 9M months of treatment in this sub segment

Further PCSK9 demand can be found among the 12M current statin patients who – despite already being on statin therapy – still meet the new criteria for needing high intensity (≥ 50%) LDL-C lowering. These patients’ options boil down to: 1) maxing statin dose if they haven’t already (20% add’l LDL-C reduction at most); 2) adding ezetimibe to their statin (15% add’l LDL reduction); or 3) adding a PCSK9 to their stain (≥ 50% add’l LDL reduction)

Of these high-risk current statin patients, 5M have LDL’s above 100 mg/dL; despite the new guidelines’ de-emphasis of specific LDL targets, we believe physicians will see the PCSK9’s as the most attractive option for these patients, even in the absence of outcomes data. If and when outcomes evidence warrants, we would expect the use of PCSK9’s to extend to the remaining high-risk statin patients whose LDLs are at or below 100 md/dl

‘Pre-outcomes’, we expect 9M months of treatment demand from statin intolerant patients, combined with an additional 9M to 12M months of treatment demand from high risk statin patients with LDL’s > 100 mg/dL. At $300 – $400 / month ‘list’ ($245 – $330 ‘net’), this indicates an early PCSK9 US market of $4.4B to $6.9B

‘Post-outcomes’, we expect a further 6M to 8M months of therapy, raising the total US market estimate to between $5.9B and $9.6B

Current consensus reflects a median 2019 global sales expectation of just $3.2B, as compared to our lower bound US expectation of $4.4B

For our full research notes, please visit our published research site.

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