Abbott's anti-cholesterol enters the market with bright prospect
Abbott Laboratories is looking to expand its presence in a growing market for anti-cholesterol drugs, as the ranks of the elderly in the U.S. swell over the next five years.
The North Chicago-based pharmaceutical giant is betting that its drug Simcor, recently approved by the U.S. Food and Drug Administration and to be available by the end of the first quarter, will lead the way.
"We view the Simcor approval as an important step in Abbott's long-term strategy to offer several options for the treatment of blood lipid disease, and to capture a larger piece of the $20 billion annual U.S. market for blood lipid disease drugs," said Phil E. Nalbone, analyst for the Toronto-based brokerage firm RBC Capital Markets.
Simcor is a single-pill, fixed-dose combination of Abbott's Niaspan and and New Jersey-based Merck & Co. Inc.'s simvastatin, the generic form of the popular cholesterol-fighting drug Zocor.
Simcor is used along with dietary changes to lower levels of triglycerides and LDL, or "bad" cholesterol, while raising HDL, or "good" cholesterol, in overweight patients when treatment with simvastatin or Niaspan alone is not adequate.
Abbott spokeswoman DeAnna C. DuBose said, "Simcor provides physicians the opportunity to prescribe multiple therapies in one treatment."
Nalbone said Simcor is not a "blockbuster" drug, but it represents another important building block in the company's approach to lowering fats in the blood.
Nalbone projected modest sales for Simcor of $70 million in 2008 and $275 million in 2009. Eventually, Simcor sales could rise to approximately $500 million by 2011 or 2012, he said.
That would amount to a compounded growth rate of 63.5 percent annually over the period 2008 to 2012.
Glenn Reicin, drug industry analyst with New York-based investment banking and brokerage firm Morgan Stanley & Co. Inc. said in a research note released Monday that the recent approval of Simcor could lead to an earlier than expected launch and removes an element of uncertainty that appears to have been putting pressure on the company's stock, as concerns had arisen about the approvability of Merck's own blood lipid drug Cordaptive and Abbott's Simcor.
"The early approval will likely provide upside to our 2008 sales estimate of $100 million. Simcor could possibly see some benefit from the recent Vytorin fallout, as Niaspan scripts have been accelerating," Reicin wrote in the research note.
Meanwhile, Morningstar Inc. analyst Damien Conover said he is wary about the market opportunites of this new drug. He pointed out that anti-cholesterol drugs only represents 3 percent of Abbott's total sales.
But as baby boomers get older prospects for anti-cholesterol drugs worldwide should steadily expand.
PriceWaterhouseCoopers International Ltd., in its latest study "Pharma 2020: The Vision. Which path will you take?" seems to confirm this. The report noted that almost 40 million people in the U.S. suffer from high level of cholesterol and approximately 45 percent of those do not take medication..
Manisha Chandalia, associate professor at the University of Texas' Southwestern Medical Center, said society has seen increased rates of obesity, metabolic syndrome and diabetes. "Simvastatin alone can lower LDL cholesterol, but does not improve HDL cholesterol significantly. Therefore, combination of niaspan and simvastatin as simcor will be useful," Chandalia said.
But Abbott is already looking to its next generation of anti-cholesterol drugs, said Abbott spokeswoman Elizabeth A. Hoff. She said, one product, currently labeled ABT-335 is slated to launch in 2008.