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Priority FDA Review for Eliquis - Analyst Blog

Posted: 11/30/2011 9:15:00 AM
Referenced Stocks: AF;BAYRY;BMY;JNJ;PFE

Recently, Bristol-Myers Squibb Company ( BMY ) and Pfizer Inc . ( PFE ) announced that their anti-clotting drug Eliquis (apixaban) will be reviewed on a priority basis by the US Food and Drug Administration (FDA). A decision from the US regulatory body is expected in the first quarter of 2012 (target date: March 28, 2012).

We note that the US regulatory authority generally reviews those drugs on a priority basis which offer major advances in treating diseases that do not have adequate therapy. Applications for priority review designated drugs are reviewed by the FDA within six months of submission as against the usual ten months.

Bristol-Myers and Pfizer are looking to get the blood thinner approved in the US for preventing strokes and systemic embolism in patients suffering from atrial fibrillation ( AF ). AF refers to a cardiac rhythm disorder characterized by an erratic heartbeat.

The FDA accepted the new drug application (NDA) for Eliquis on the basis of positive results from two late-stage trials, ARISTOTLE and AVERROES. The studies evaluated the efficacy and safety of the drug for preventing stroke or systemic embolism in approximately 24,000 AF patients.

We remind investors that Eliquis was cleared in the EU earlier in the year for preventing venous thromboembolic events (VTE) in adults who have undergone elective hip or knee replacement surgery. However, the AF market is more lucrative and the drug is under review in Europe for the AF indication.

Since Eliquis offers multi-billion dollar sales potential, we believe if the candidate is approved for the AF indication then it would be a major boost for Bristol-Myers/Pfizer's top line.

However, Eliquis would face intense competition in the anti-coagulant market on approval.  Eliquis will have to compete with Bayer / Johnson & Johnson ' s( BAYRY / JNJ ) blood-thinner Xarelto. Moreover, the arrival of Boehringer Ingelheim's Pradaxa has intensified competition in the market.

Our Recommendation

Currently, we have a long-term "Neutral " recommendation on Bristol-Myers, which carries a Zacks #3 Rank (short-term "Hold" rating).

While our long-term recommendation on Pfizer is similar, the shares of the company carry a Zacks #2 Rank ("Buy" rating) in the short-run. While near-term earnings growth at Pfizer will come in the form of cost cutting and share repurchases, longer-term growth will be dependent on the success of drug development.

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