Regeneron Cholesterol-Drug Worries Ding Stock

Regeneron Pharmaceuticals (REGN) plunged 10% Friday afternoon after trading was briefly halted for volatility, after word got out that the FDA is investigating its cholesterol-drug candidate for adverse effects.

The item was buried deep in a 20-F form Regeneron's big-pharma partner Sanofi (SNY) filed Friday.

Under a discussion of the two firms' collaboration on alirocumab, a monoclonal antibody of a type called PCSK9 for treating high cholesterol, the form stated: "Sanofi and Regeneron have been advised by the FDA that it has become aware of neurocognitive adverse events in the PCSK9 inhibitor class. Neurocognitive adverse events have also been associated with the use of statins for lowering LDL cholesterol. Neither company knows the circumstances under which the FDA became aware of these adverse events or whether these adverse events were observed with a drug candidate tested as monotherapy or in combination with a statin or other cholesterol-lowering agent. The FDA has requested that Sanofi and Regeneron make an assessment of potential neurocognitive adverse events across the global development program for alirocumab, especially in the longer-term studies. ... While neither company is aware of any neurocognitive adverse event signal relating to alirocumab, if this or another adverse event signal is detected, the further development of alirocumab may be delayed or fail, or its commercial value diminished, which could severely harm future prospects."

The stock reaction seems to have been due to this going out on Twitter, because it wasn't actually new: Regeneron's own annual report from Feb. 13 said exactly the same thing. Nonetheless, it cast a shadow over the blockbuster expectations for alirocumab as well as other PCSK9s in development by Amgen (AMGN) and Pfizer (PFE). Both those stocks were down only a bit.