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There's a nice town in Massachusetts, Framingham. In 1948 some of those brainy doctors from Boston picked Framingham for an interesting little study. They poked and probed and measured everybody they could get their hands on... and then went back to Boston. Every year they came back like blood sucking vampires come home to Transylvania, they brought their needles and their tubes and they would sweep and and then be gone. Year after year after year they drew a blood stained monitored picture of the health in Framingham. By and by an amazing picture started to develop.

Did you know that in the 1950's a good doctor might be pleased that his 60 year old patient had a nice healty high blood pressure? It was thought to help push that blood through those slightly old arteries. Wanna hear something really nuts? In the early part of the 20th century, a cholesterol of 300 was though to be a sign of good health. Those were the days of tuberculosis, syphilis, and all manner of infectious diseases. To generate a cholesterol level of 300, you had to be well fed and free of wasting diseases... sort of like those glorious Rubenesque beauties... healthy was plump. As you weren't very likely to live to see the big 6-0, a high cholesterol was the least of your worries.

The very phrase "risk factors" comes from the Framingham study. The idea of risk factors was unheard of until they started being defined by those Bostonian needle freaks. It was in 1960 that it really became clear there was a link between smoking and heart disease. Shortly there after it became clear that high cholesterol levels were not good. By 1967, they figured out exercise was good (give 'em a break, they're from Boston). In the mid 70's it became clear that HDL cholesterol actually lowered CV risk while LDL really elevated it.

As with many other advances in all of science, there was a wonderful confluence of events occuring. While cholesterol's role in cardiovascular disease was being elucidated, doctors in Japan were investigating naturally occring drugs that inhibit cholesterol systhesis... they thought they were looking for an antibiotic. Remember cholesterol is a brick, a very important brick. The idea was to inhibit bacterial cholesterol synthesis so they grems couldn't make good forts (cell walls,etc). The research caught the attention of Merck who bought it and by 1976, they had isolated lovastatin. Eleven years and 400 odd million dollars (1980's dollars) Mevacor was approved.

Did you know that in 1980, Merck quit research on lovastatin because they were worried about its toxicity. Doctors at Oregon Health Sciences University and the University of Texas begged for Mevacor so they could treat patients with severely high cholesterol which had been unresponsive to all available drugs. The FDA gave special permission to resume human studies in 1982. Think about that! Consider how many thousands upon thousands of lives have been saved because the FDA went out on a limb. Consider that action in light of the screaming about the FDA today... tell me, what drug are we not going to get because the FDA ain't gonna be going out on any limbs these days? Ten years ago the FDA was too strict, now they're too lenient... being overseen by the congress is like have Dr Jekyll for a dad and Cruella DeVil for a mom.

Anyway, the cholesterol/HDL/LDL information caused doctors all over the world to start checking their own levels of HDL and LDL. In Italy, a couple of nice doctors were testing people and found a group of souls with almost NO HDL... but also NO HEART ATTACKS. These people all hailed from a nice little town in northwestern Italy called Limone sul Garda. These poor doctors had to go to this place figure out what was going on...

good work if you can get it.

It turns out those people had only alittle HDL protein... remember this is the Dudley Do-Right scavanger protein.... but what HDL they had was hellaHDL... a super duper cleaner upper HDL. They isolated the protein part, synthesized it, bottled it, and sold the rights to Pharmacia. This was in 1977-79. You won't believe what happened next. The scientists at Pharmacia promptly put it up on a shelf and forgot about it.

While this is going on... the exact opposite thing is occuring in Hawaii. There's a group of Asian-Americans that have extra HDL but a higher risk of heart attacks. I don't know what it is about genetic defects in cholesterol metabolism and living in great places. Anyway, from these folks comes CETP inhibitors which are bought and sold... and one finally comes to rest in the greasy cholesterol stained hands of Pfizer. It's called Torcetrapib. The other big one is called JTT-705 and seemed to be owned by a company called Japan Tobacco Inc... I kid you NOT.

Now... we've got Mevacor and the parade of statins that simply lower the number of Three Stooge cholesterol transport trucks on the road. That turns out to be a huge help in decreasing CV risk. We figured out there were modifiable CV risks from the poor folks of Framingham. And somewhere, on a dusty lab shelf sat a bottle with a billion dollars in it.

One day in 1995, Pharmacia and Upjohn decide to merge. They hire a consultant to look in all the nooks and crannies of Pharmacia to see what they can sell off... just like people getting married, they sell off the stuff they don't need. David Scheer of Scheer & Co comes across this dusty 15 YEAR OLD bottle of Apo-I Milano. He looks around... and says... what would you guys take for this stuff? 15 million dollars..... 15 million dollars for that junk? Yeah, sure... boom! sold.

Shear knows some good science types... in fact he knows the guy who developed lipitor for Warner Lambert (that's right, Warner-Lambert). So, in 1998 some good lipid scientists from Warner-lambert leave and start a biotech company called Esperion. Remember the great wash of money flowing over all things tech and biotech in 1998? In 2000, Pfizer grabs Warner-Lambert sans a few good lipid scientists (who'da thunk it). In 2002, Pfizer buys Pharmacia... with that dusty bottle of Apo-I Milano long gone. By the way... that buyout put Fred Hassan out of a job but he bounced back in 2003 with the CEO job at Schering-Plough (this could be important). The Esperion guys are hot to work on all things HDL.

Think about this... we have not discussed one single drug that was discovered and then then marketed by a large pharma company. Not one single one... all the research you hear about large pharma doing... do not be deluded. Large Pharmaceuticals are sales and marketing companies just like P&G, Kinberly Clark, Kraft, Phillip Morris, etc. The largest portion of their research goes into enhancing and extending the useful lives of their products. Where do they get their products? They buy them! Unless you're Merck under CEO Raymond Gilmartin.

Now take a gander at this little table...

Symbol Company Name ROE: 5-Year Avg. ROI: 5-Year Avg.
WYE Wyeth 17 11.2
NVS Novartis 17.7 16.4
PFE Pfizer Inc. 21.9 18
SGP Schering-Plough Corp. 24.7 23
ABT Abbott Laboratories 25.3 19.5
JNJ Johnson & Johnson 26.1 23.6
AZN AstraZeneca PLC (ADR) 28.4 26.4
LLY Eli Lilly & Co. 38.3 25.4
BMY Bristol-Myers 41.4 22.3
MRK Merck 43.6 33.9
GSK GlaxoSmithKline 57.8 42.2

average return on equity....... 31%
average return on investment.................... 24%

do you think the "blockbuster model" for big pharma is dead? You ain't see nuttin yet. Right now big pharma is on the skids with investors. Can you show me any other industry that puts that sort of investment return together? Right now the investing world seems to think they're gonna dry up and blow away. Ohhhh yoooo hoooo value investors... they're ringin a bell here. All we gotta do is figure out who the best several are.

We are going to redefine the treatment of cardiovascular disease in the next 5 years. If you like to eat cheeseburgers and are a bit overweight... if you can just make it to 2010... your biggest concern might be mad cow disease instead of a heart attack. Between the CETP inhibitors, Peroxisome proliferator-Activated Receptor (PPAR) modulators (say that three times), anti-inflammatory approaches, supercharged HDL's, and rimonabant... things are looking very good.

Next post we'll touch on rusting and wearing out of body parts... inflammation... and then start tryin to figure out where to make some money.

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