Two Plays on Cholesterol

12/03/2013 8:00 am EST

Focus: STOCKS

Industry experts say the new guidelines for treating high cholesterol could double the number of people on medications to lower their cholesterol, suggests Diane Alter in Money Morning.

Statin drugs are already a profitable niche in the drug market. But the biggest winners will be makers of lower-priced generics. Those include Mylan Labs (MYL) and Teva Pharmaceuticals (TEVA).

Mylan Labs, a leading global generic and specialty pharmaceutical company, received final FDA approval for the cholesterol medicine fluvastatin, the first generic version of Norvatis AG's widely-prescribed Lescol capsules, in 2012.

The product is approved for both heredity and non-familial high cholesterol. It's also approved for the secondary prevention of cardiovascular disease. Latest figures available put sales of Lescol at around $27.9 million.

Mylan maintains one of the industry's broadest and highest-quality product portfolios, which are regularly bolstered by an innovative and healthy product pipeline.

According to Thomson/First Call; of the ten analysts that follow the stock, three rate Mylan a Buy, one an Overweight, three an Outperform, one a Market Perform, one a Perform, and one an Average on shares. Daily volume averages around three million, and shares are on an upward trajectory.

Meanwhile, Teva Pharmaceuticals received FDA approval, in 2006, to sell a generic version of Merck's blockbuster cholesterol drug Zocor.

Simvastatin versions were initially priced about 30% less than Zocor. Over the next year, prices plunged as much as 90%, from $3 a pill, to about $0.30 a dose.

The falling price saved insurers and patients billions, and cost Merck a similar amount. It also advanced Teva's bottom line. Presently, simvastatin sits at Number Nine on the list of Top 20 Generic Drugs Worldwide.

Latest figures show the drug generated $1.64 billion in sales for Teva. That number will unquestionably grow under the new recommendations. Shares of the Israel-based company boast a market cap of $36 billion and 4% yield.

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