CAMBRIDGE, Mass. (TheStreet) -- Aegerion Pharmaceuticals (AEGR) , needing an escape route from its current troubles, is spending $325 million, or almost all of its cash, to purchase a recently approved, orphan-disease drug from AstraZeneca (AZN) .
The acquired drug, Myalept, received U.S. approval in February to treat generalized or acquired lipodystrophy, rare conditions in which patients are either born with too little fat tissue or lose fat tissue over time. Myalept is a replacement therapy for leptin, which regulates food intake and hormones like insulin. Patients with lipodystrophy are unable to produce enough leptin on their own.
Aegerion ended the third quarter with $367 million in cash, so it's spending almost all of it to acquire Myalept from AstraZeneca. Investors will debate whether Aegerion paid too much, but the company needed to do something to diversify its revenue stream beyond Juxtapid, its currently marketed therapy for familial homozygous hypercholesterolemia (HoFH), a rare genetic disease that causes the buildup of extremely high levels of cholesterol in the blood.
Last week, Aegerion reported disappointing third-quarter sales of Juxtapid and lowered revenue guidance for the rest of the year. Looking further out, Juxtapid's growth is expected to be negatively impacted by the new class of PCSK9 cholesterol-lowering drugs being developed by Amgen (AMGN) , Regeneron Pharmaceuticals (REGN) and others.