Pipeline Setback for Bayer/JNJ - Analyst Blog

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The HealthCare unit of Bayer ( BAYRY ) and its partner,   Johnson & Johnson's ( JNJ ) Janssen Research and Development unit, received some disappointing news recently when an advisory panel of the U.S. Food and Drug Administration (FDA) recommended against approving their blood thinner Xarelto for an additional indication.

The partners are looking to get Xarelto approved for the reduction of the risk of secondary cardiovascular events in patients suffering from acute coronary syndrome (ACS). The supplemental new drug application (sNDA) was filed late last year. ACS refers to a heart disease, which results in the blockage of a coronary artery via a blood clot. The application is being reviewed on a priority basis by the FDA, which implies a six-month review period instead of the usual ten-month period.

The sNDA contains data from the ATLAS ACS 2 TIMI 51 phase III study which revealed that treatment with Xarelto as a combination therapy (2.5 mg twice daily) caused a significant reduction in cardiovascular events such as myocardial infarction or stroke or even cardiovascular death in recently affected ACS patients compared to those treated with only the standard antiplatelet therapy.

A final decision from the FDA regarding the matter is expected by June 29, 2012 (target date). Even though the U.S. agency is not bound to follow the advice of its advisory committee, the recommendation of the panel is usually considered by the agency while deciding the fate of a candidate.

Xarelto is already approved for some other indications including the lucrative stroke prevention in nonvalvular atrial fibrillation (SPAF) indication. Apart from SPAF, Xarelto is approved for the treatment of deep vein thrombosis (DVT) in the E.U.DVT refers to the obstruction of a blood vessel, courtesy a blood clot.

Furthermore, in July 2011, the FDA cleared Xarelto for the prevention of DVT, which may cause pulmonary embolism in patients undergoing knee or hip replacement surgery.

Our Recommendation

We currently have a Neutral recommendation on Bayer in the long-run. The company carries a Zacks #3 Rank (Hold rating) in the short-run.


 
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