For the second time, the FDA has rejected Johnson &
) application to expand the use of Xarelto to prevent heart
attacks and strokes in patients who have previously experienced
severe chest pain or heart attack (acute coronary syndrome or ACS).
While JNJ's management has reiterated its confidence in the
efficacy of the drug and clinical data, we believe that the chances
of the drug getting approval for the condition are bleak now.
Nonetheless, we still think that Pfizer (
) should be able to get similar approval for Eliquis, considered as
the closest competitor of Xarelto. Both of these drugs are
anti-coagulants (blood thinners) and currently approved for
preventing strokes with indications of abnormal heart rhythms and
preventing blood clots in patients with knee or hip
See our complete analysis for : Johnson &
Johnson & Johnson: A Lost Opportunity?
Acute coronary syndrome (clotting in coronary arteries) is one
of the most prevalent diseases in the world, causing over 1.2
million hospitalizations each year. Despite many available
treatments, heart attacks are still one the leading causes of death
globally. Both anti-platelet agents like Aspirin and
anti-coagulants (anti-thrombotics) like Warfarin can be used to
prevent clotting and heart attacks in ACS patients. But, current
standard anti-coagulant drug Warfarin is used mostly in special
circumstances due to little efficacy.
Attracted by the multi-billion dollar opportunity, leading
pharma companies, including J&J and Pfizer, have been striving
hard to tap the available opportunity through their anti-coagulants
Xarelto and Eliquis respectively. They have been pitching their
drugs against the current standard anti-coagulant drug Warfarin.
However, with the second rejection for ACS indication, JNJ's plans
seem to have hit the roadblock. While the full details of rejection
remain unclear for now, what may have worked against Xarelto is
that while it reduced the risk of major heart attacks in ACS
patients in clinical trials, some patients witnessed serious
bleeding. Bleeding is a major side effect of blood thinning drugs,
sometimes even leading to death, and side effects matter as much as
the drug's efficacy in determining a drug's future.
Further, the ALTAS clinical trial data, which was submitted to
the FDA, compared Xarelto with placebos instead of Warfarin.
Xarelto will need more clinical data to prove its efficacy over
Warfarin. We think that getting the approval will now be even more
difficult for Xarelto and we will adjust our revenue expectations
from the drug going forward. Earlier, we were expecting Xarelto to
receive conditional approval with some label warning. However, we
will be closely watching for further details on what led to the
rejection of Xarelto and if there is any ray of hope.
No Concerns For Pfizer For Now
Nonetheless, we don't see any concern for Eliquis as it has
exhibited significant safety over Warfarin and Aspirin (ARISTOTLE
and AVERROES trials) in reducing the risk of stroke and dangerous
blood clots without major bleeding among all non-Aarfarin drugs,
including Xarelto and Pradax. The drug was recently approved for
patients suffering from atrial fibrillation, which is not caused by
a heart valve problem, even as Pfizer is looking to add another
major condition, venous thromboembolism, for Eliquis.
Last month, Eliquis, when compared with a placebo, managed to
significantly reduce blood clots risks in patients suffering from
venous thromboembolism or VTE (a blood clot within a vein). We see
these impressive clinical results as a positive sign for approvals.
Eliquis will not be able to achieve its full sales potential of $3
billion without its extension for treatment of VTE and ACS.
We are in the process of updating our $75 and $27 price
estimates for Johnson & Johnson and Pfizer respectively to
reflect the earnings, the reporting structure changes and recent
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