What to expect out of the American Heart Meeting

The big cardiology meetings- AHA and ACC always provide a lot of new data regarding major cardiac drugs and interesting opportunities for investing in the companies that make them. I will outline some of important trials that will be coming out of the AHA this week, what I think the data will show and what it will mean for the companies involved.

Prasugrel: The data regarding this drug from Lilly, LLY, has been eagerly awaited. This antiplatlet drug has been widely hailed as a safer and more effective version of Plavix. All patients who receive stents and many other cardiac patients need these drugs and as a result, Plavix- made by Sanofi and Bristol Myers - SNY and BMY has grown to a $5 billion/year drug. Sanofi and BMY have had essentially no competition in this market for years. Positive Prasugrel data could change this. My bet is that this trial will be a huge failure. LLY just announced that they were putting two smaller prasugrel trials on hold while they changed the dosage used- not something that would make sense if their previous dosing had working. ADVANTAGE- SNY and BMY. Disadvantage LLY

Cordaptive and Simcor: More data regarding MRK’s new cholesterol medicine- a combination of niacin and drug to decrease flushing- and Simcor- ABT’s combination of niaspan and simvastatin. I suspect the Cordaptive trial will be another disappointing trial. The early data on this drug- showed some improvement in symptoms compared to short acting niacin- which is no longer widely used as a result of flushing. The data on this looked similar to the data for the controlled release niaspan that ABT makes. The earlier data also suggested more liver toxicity and muscle toxicity from the MRK combination. The new Abbott drug is less novel- just a combination of two drugs which are already widely used. The trial on this will likely be very impressive. This combination should be quite a commercial success- the lipid lowering from this combination should be at least as good as vytorin (from MRK, SGP) and crestor ( from AZN) and better than lipitor ( from PFE) although the drug won’t be quite a well tolerated as these others. ADVANTAGE: ABT DISADVANTAGE : MRK and to a lesser extent SGP,AZN and PFE

Torceptrapib: More data from the failed CETP trial from PFE. The big question here is : Did this drug fail because of Blood pressure side effect or because of something more fundamental. I believe the answer is that the class destined to failure. The small BP changes seen in the trial seem very unlikely to explain the negative results. If I am right, MRK and Takeda will have to give up on their drugs in the same class. DISADVANTAGE: MRK and TAKEDA.

Crestor: One of the most interesting trials in to be released at the meeting is a long term trial of Crestor in patients with heart failure. The primary outcome is mortality. No statin has ever been tested in this population- although Lipitor does have an indication for preventing heart failure hospitalizations. The main knock against both Crestor and Vytorin is a lack of outcome data. This could change here. This trial may well succeed- if for no other reason than that most patients with heart failure also have coronary artery disease and crestor probably has a mortality benefit in coronary disease. I put the odds at about 50/50. A positive trial here could really change Crestor’s market share. It has not lived up to its potential - never able to shake a lingering and largely unfounded concern about safety. It has only 9% of the market. Growth would be at the expense of lipitor and Vytorin ( PFE and MRK/SGP respectively). A failed trial will likely not hurt Crestor much- unless the drug is more poorly tolerated than we thought. ADVANTAGE: AZN. DISADVANTAGE: PFE, MRK, SGP.

Ranexa. CVTX will be releasing data regarding heart failure and anti-diabetic effect from the angina drug as shown in their MERLIN trial. My guess- minimal improvement in BNP- making the drug not a viable CHF drug and a profound improvement in HGBA1C levels- suggesting a strong future for the drug in diabetes. Previous trials have shown an improvement of 0.7-1.0 percent. If a similar result will lead to a partnership with a big pharma company, a big diabetes trial and a huge new potential market for Ranexa with a jump in market cap to match. ADVANTAGE: CVTX.

So if things come out the way I suspect, the big winners will be CVTX, AZN, SNY and BMY.

Merck should be the biggest loser here, but SGP PFE and LLY will all likely trade down.

As I have disclosed before, I have long positions in CVTX and SNY, and am short MRK. I have no position in the other companies discussed.