Pipeline Update at Bayer - Analyst Blog

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Investors in the pharma/biotech sector eagerly wait for pipeline updates as they play an important role in deciding whether or not to invest in a particular company. Pipelines are of prime importance as far as pharma/biotech companies are concerned. These companies spend a significant amount in advancing their pipelines.

The HealthCare segment at Bayer ( BAYRY ) and partner, Johnson & Johnson ( JNJ ) received yet another setback from the U.S. Food and Drug Administration (FDA) regarding Xarelto.

The FDA issued complete response letters (CRLs) in response to the supplemental New Drug Applications (sNDA) submitted by the companies seeking approval of Xarelto in combination with standard antiplatelet therapy to bring down the risk of thrombotic cardiovascular events and stent thrombosis in patients suffering from acute coronary syndrome (ACS). The news did not come as a surprise as last month, the FDA's Cardiovascular and Renal Drugs Advisory Committee had voted against the approval of Xarelto in combination with standard antiplatelet therapy to reduce the risk of thrombotic cardiovascular events (heart attack, stroke or cardio-vascular death) in patients suffering from ACS.

We note that Bayer and Johnson & Johnson have earlier been subject to a series of setbacks regarding the ACS indication of Xarelto in the U.S. In Jun 2013, the companies received a CRL for Xarelto's sNDA for the reduction of risk of stent thrombosis in patients suffering from ACS.

Before that in Mar 2013, the companies received another CRL from the FDA for Xarelto's (2.5 mg twice daily) sNDA submission for the reduction of the risk of secondary cardiovascular events in patients suffering from ACS. The initial CRL for this indication was issued in Jun 2012, after which Bayer and Johnson & Johnson had resubmitted the sNDA for blood-thinner Xarelto in Sep 2012.

Xarelto is however approved for several indications in the U.S. including stroke prevention in nonvalvular atrial fibrillation, deep vein thrombosis (DVT), pulmonary embolism (PE) and reduction of the risk of recurrent DVT and PE.

We are highly disappointed with Xarelto's latest CRL. Bayer and Johnson & Johnson have been really struggling with Xarelto's ACS indication in the U.S. Further setbacks may jeopardize the drug's future in the U.S. for this indication. Bayer recorded Xarelto sales of €259 million for the third quarter of 2013.

Meanwhile, in May last year, Xarelto was approved in the EU for the prevention of atherothrombotic events (cardiovascular death, myocardial infarction or stroke) after an ACS in adults suffering from elevated cardiac biomarkers at a dose of 2.5 mg twice-daily (BID) in combination with antiplatelet therapy.

Bayer currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Alexion Pharmaceuticals, Inc. ( ALXN ) and Actelion Ltd. ( ALIOF ). While Alexion holds a Zacks Rank #1 (Strong Buy), Actelion carries a Zacks Rank #2 (Buy).



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BID , ALIOF , ALXN , BAYRY , JNJ

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