Those large AH price moves for BMY and PFE are not crazy insofar as Eliquis has the potential to be a very big-selling drug. The drop in Bayer’s share price today seems a bit excessive, however.
Pfizer and Bristol-Myers Squibb may have just sneaked ahead in the race to create a new blood-thinner to rival the 60-year-old drug warfarin.
In a clinical trial result that clearly exceeded the expectations of Wall Street analysts and cardiologists, the duo’s drug, Eliquis (generic name: apixiban) proved superior to warfarin both in terms of efficacy (preventing strokes) and safety (meaning patients taking Eliquis were less likely to have serious bleeding). The drug makers announced the result in a press release [#msg-64521497]; the data will have to be presented at a medical meeting and then vetted for a peer reviewed medical journal.
Shares of Bristol-Myers were up 7% in after-market trading. Shares of Pfizer rose 3.75%.
The market for drugs to replace warfarin, originally derived from rat poison, is one of the biggest opportunities currently available to the drug industry. The drug is used to prevent strokes in patients with a heart rhythm disorder called atrial fibrillation as well as blood clots following surgery. But warfarin is tricky to dose, requiring frequent blood tests to get the dose just right so patients neither get clots nor bleed too much. Even eating the wrong foods can blunt its efficacy. Some patients refuse to take it. If they prove effective replacements, warfarin replacements could eventually generate $12 billion annually or more.
Eliquis has been in third place in the race to replace warfarin, but the new results may give it a marketing edge because other drugs are less able to claim superiority on either safety or efficacy.
Pradaxa, from Boehringer Ingelheim, was approved by the Food and Drug Administration last October. Although it seemed to outperform warfarin, the design of the trial (doctors and patients knew who was on warfarin and who was getting Pradaxa) weakens that conclusion, and the FDA did not allow a superiority claim.
Pradaxa is being marketed to consumers via television and print advertisements. It has 5% of the total market for warfarin. But in the narrower atrial fibrillation market, which is where Pradaxa is already approved, it is being used 16% of the time, says Mark Schoenebaum, a health care analyst at stock research firm ISI Group. Boehringer says more than 200,000 patients have already been prescribed the drug, and that 90% of patients with atrial fibrillation can get the drug paid for by insurers; for half, it is already available at the lowest co-payment. Doctors do have issues with Pradaxa, including its $230-a-month price, and the fact that it must be taken twice a day instead of once. Eliquis is likewise a twice-a-day drug. If patients do miss doses, will they have strokes?
Xarelto, which is being developed by Bayer and Johnson & Johnson, has the advantage of being a once-a-day drug, and it has already been filed with the FDA, meaning it could reach the market in the second half of this year, six to twelve months ahead of Eliquis. But in its large clinical trial in atrial fibrillation, Xarelto failed to beat warfarin on either efficacy or safety; the two drugs were equivalent[#msg-56712414, #msg-56717469]. This means that in the atrial fibrillation market, Eliquis now has an advantage.
Lawrence Biegelsen, an analyst at Wells Fargo who has a buy rating on J&J, wrote in a note to investors tonight that while the new data give Eliquis “an edge,” there are still some advantages for Xarelto. The Bayer-J&J drug will probably receive an be approved for use after orthopedic surgery, whereas Eliquis won’t[Herper messed up here: Eliquis is already approved for VTE prevention in Europe (#msg-61114160), although it may not get approved in this indication by the FDA (#msg-58061618)]; it could also still prove effective in acute coronary syndromes – patients with chest pain – an area in which Eliquis has failed [#msg-56880416]
But there’s no doubt that Eliquis just pulled ahead. Schoenebaum, the ISI group analyst, polled 234 fund managers before the data came out and found 80% did not expect apixiban to have better efficacy. He forecasts peak sales of $3.5 billion for the drug in atrial fibrillation alone. Timothy Anderson at Bernstein Research has a more conservative estimate of $1.4 billion in annual sales in 2015. He wrote in a note to investors tonight that if he’s low by just $500 million, it would boost Pfizer’s 2015 earnings per share by 1% and Bristol’s by 5%.
Pfizer and Bristol were already positioning Eliquis as being the option for patients who refuse to take warfarin, having run a clever study that compared the drug to aspirin[#msg-54576974]. If the new drug is also more effective, it could be even bigger.‹
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