More that 30 million Americans woke up one day late last year to find they weren’t quite as healthy as when they went to sleep. 

That’s because the American Heart Association changed the guidelines for what is considered high blood pressure (hypertension) for the first time in 14 years. The new guidelines are meant to improve treatment options and start people on therapies sooner rather than waiting too late.

Hypertension is the second-leading cause of preventable deaths worldwide, second only to smoking, with a market that already tops $84 billion in the U.S. alone. 

#-ad_banner-#And that was before the new guidelines were released, potentially driving the market for treatments even higher.

Tens Of Millions Of Americans Need To Visit The Doctor
Trying to head off the growing list of cardiovascular problems in the United States, the American Heart Association has lowered the cutoff determining who should be treated for high blood pressure. It’s now recommended that Americans with blood pressure of 130/80 or higher be treated versus the previous cutoff of 140/90 established in 2003. 

That means 46% of the U.S. adult population, an estimated 103 million, is now considered at-risk of hypertension compared to an estimated 72 million adults under the old guidelines. Blood pressure of 120/80 or lower will still be considered healthy.

A government-sponsored study in 2015 found that hypertension patients age 50 and older saw heart-related deaths fall 43% when systolic blood pressure was lowered below 120 versus the old guideline of 140 or higher.

A 17-year study of U.S. health care spending found Americans spend more on cardiovascular disease than any other group, spending more than $231 billion in 2013. Treatment of hypertension reached $83.9 billion with an annualized growth of 5.1% over the study period, well over the 3.5% average annual spending growth for all conditions.

In fact, spending on hypertension therapies amounted to more than Alzheimer’s, asthma, HIV/AIDS and Parkinson’s disease combined.

3 Winners In The Change To Hypertension Guidelines
The last time the hypertension guidelines were changed, from 160/100 to 140/90 in 2003, one study estimated that it would add between $8 billion to $10 billion a year in medical costs, including prescription drugs. 

Most branded prescription drugs for hypertension have long lost patent protection but the new guidelines could reinvigorate sales, adding surprise support to drug revenues. I’ve found two companies still booking hundreds of millions on a once-blockbuster blood pressure medication as well as a biotech company that could be on the verge of a breakthrough in a rare hypertensive disease.

Novartis AG (NYSE: NVS) has struggled since it lost its patent protection on angiotensin receptor blocker Diovan, a blockbuster hypertension treatment, but the increase in potential patients in the space could help support sales. The drug still accounted for nearly $1 billion in 2017 sales and a resurgence could bring investors back to the shares.

Not only does Novartis stand to benefit from increased prevention of hypertension, but its Entresto product for heart failure patients has outperformed expectations for sales and has been shown to improve the quality of life for patients in several recent studies.

Novartis also has several pipeline drugs, including Aimovig for migraines and BAF312 for multiple sclerosis, that could hit market soon and drive sales. The company books nearly 70% of sales from branded drugs but also has a solid eyecare business and generics segment that help to balance revenue.

Merck (NYSE: MRK) has also battled falling sales for its Hyzaar drug but could see renewed interest in the diuretics medication for hypertension patients. Sales in 2017 were $484 million compared to annual revenue of nearly $2 billion before the patent expiration in 2011. 

The company’s full line of cardiovascular drugs accounted for $3.1 billion in 2017 sales, nearly 9% of total pharmaceutical sales. Full-year results were supported by major growth in blockbuster treatments including 199% sales growth to $1.7 billion for hepatitis-treatment Zepatier and 171% sales growth to $3.8 billion for its Keytruda oncology drug.

Merck has largely worked through its patent-cliff that has weighed on the shares over the last four years. R&D is starting to produce some blockbuster heavyweights and generic competition is still years away in some of its biggest revenue producers. The company returned nearly $8.5 billion to investors over the last four quarters, a 5.5% cash yield through the dividend and share repurchases.

Arena Pharmaceuticals (Nasdaq: ARNA) has completed Phase 2 evaluation of its Ralinepag program for pulmonary arterial hypertension (PAH). The drug was granted orphan status by the U.S. Food and Drug Administration in 2014 which brings faster case review and increased patent protection. 

While PAH only affects a limited amount of the population, global market sales for treatment were $5.8 billion in 2015 and are expected to grow to $6.7 billion by 2025. That could make Ralinepag a blockbuster and other indications for the drug could make it a massive asset. Shares surged as much as 41% in July 2017 when positive phase 2 data was reported.

In the first quarter of 2018, Arena is expected to announce phase two results in its Etrasimod program. This drug is targeted to four indications, including the ulcerative colitis market, which is expected to reach $3 billion by 2029 and help more than 1.7 million people in the United States alone.

Risks To Consider: The branded hypertension drug market faces stiff competition from generics and increased sales on the new guidelines will be split among many competing treatments.

Action To Take: Position ahead of an increase in sales of hypertension medications on a change in the treatment guidelines with best-of-breed drug companies.

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