Pfizer's (
PFE
) blockbuster potential drug Eliquis (co-developed with
Bristol-Myers Squibb (
BMY
)) has received the European Medicines Agency's (EMA) approval for
expanding the drug's use to prevent heart attack and stroke in
adult patients with nonvalvular atrial fibrillation, a type of
abnormal/irregular heart beat. The approval will certainly help
boost optimism around the drug and could get the stock moving even
as the approval was anticipated following a European medical
panel's positive opinion to extend the drug (Read
European Panel Backs Pfizer's Eliquis For Atrial Fibrillation
). However, the drug still lacks the U.S. FDA approval without
which the drug cannot achieve its full sales potential going
forward.
See our complete analysis for Pfizer
Eliquis is a drug used in blood thinning and is part of the
antithrombotic family, which helps prevent clotting inside the body
that can restrict blood circulation to the organs. The drug is
currently approved in many countries (excluding the U.S.) for
preventing blood clots in patients who have knee or hip
replacements. But the drug's extension to patients with atrial
fibrillation and acute coronary syndrome (related to the blockage
of coronary arteries) holds the key for its future.
Atrial fibrillation increases the risk of stroke almost five
times than those without it and is estimated to impact millions of
individuals worldwide (1% of adults worldwide, 9 million in Europe
and the U.S.). Therefore, the condition offers a
multi-billion dollar opportunity for drug manufacturers to come up
with an antithrombotic drug that can help prevent heart attack in
patients with a history of heart problems. The EMA's approval will
begin to open a larger market as the drug has not yet been approved
for indication anywhere.
The EMA approval makes the drug's case to receive the U.S. FDA
approval stronger as the drug has been delayed two times, citing
need for more information on management and verification of data.
But we believe the drug will eventually be approved in the U.S. by
early next year (around March). The drug has shown higher efficacy
in preventing clots and strokes compared to warfarin, a standard
treatment in clinical trials. The drug is also undergoing phase III
clinical trials for the treatment of Venous thromboembolism (a
blood clot within a vein), considered the third most common
cardiovascular illness after acute coronary syndrome and
stroke.
With the EMA approval, the company can fend off significant
patents expiry in its cardiovascular division as Eliquis could
garner as much as $3 billion in peak sales (Read
Pfizer Patent Cliff: A Look At The Cardiovascular Drugs
Division
). However, much of this is dependent on the FDA approval and any
setback there could have a substantial impact on the company's
value as Pfizer's cardiovascular division (excluding Lipitor)
contributes nearly 10% of the our $26 price estimate, which we
are in the process of revising. Further, any delay in approval
would strengthen the foothold of its closest rivals Johnson &
Johnson's (
JNJ
) Xarelto and Boehringer-Ingelheim's Pradaxa.
By moving the trend-line in the chart below, you can see the
impact of revenue from non-Lipitor cardiovascular drugs on our
price estimate for Pfizer's stock.
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