This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Aegerion Stock May See a Resurgence After Hitting Bottom From Ongoing Controveries

NEW YORK (TheStreet) -- Receiving orphan drug designation from the Food and Drug Administration is like manna from heaven for biotech companies, as long as there are enough patients to sustain profitability. Estimating the patient population for a rare disease can get tricky.

Aegerion Pharmaceuticals
  (AEGR - Get Report) knows this problem well, which is why its stock price has dropped from $100 per share to $30 per share in seven months. Aegerion's chart looks scary, but I believe the bottom may finally be in. Its shares closed Friday at $34.06, down 52% so far this year.

Investors love companies that develop drugs for rare, or orphan, diseases because the likelihood of getting the drug approved is higher. Since 1983, the FDA lists 3100 orphan drug designations. Out of those, 455 have been approved, amounting to a 14.6% approval rate, with an average period of 4.26 years from orphan designation to approval.

That may not seem like much, until you consider the overall numbers. The approval rate for all drugs from preclinical stages is 8%, and approval takes anywhere from eight to 20 years on average. Bottom line, if a company gets an orphan designation, chances of approval are nearly doubled, and approval time is shortened by as much as 80%.

Interestingly, the orphan drug addiction for biotechs has really heated up in the past five years. Thirty-six percent of all orphan designations have been granted in the last five years, along with 28% of the approvals. For perspective, the Orphan Drug Act is over 30 years old.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AEGR $26.00 -0.65%
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.56 -0.99%
TSLA $187.59 -0.63%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs