Bayer/Johnson & Johnson to Expand Xarelto Label Further

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Bayer (BAYRY) and partner Johnson & Johnson (JNJ) announced that they will be evaluating their anticoagulant product, Xarelto, in three new indications in new studies. The companies intend to expand their global clinical development program on Xarelto for the prevention of potentially deadly blood clots in patients at risk of arterial thromboembolism.

In a global phase III study – NAVIGATE ESUS – Xarelto will be evaluated in patients suffering from embolic stroke of undetermined source. In another phase III study – VOYAGER PAD – the companies will explore the potential benefits of the drug in reducing thrombotic vascular complications in patients suffering from peripheral artery disease undergoing peripheral artery interventions. Xarelto will also be studied for long-term prevention in patients who have suffered an acute coronary syndrome (ACS.V) in the phase II GEMINI ACS 1 study.

We note that Xarelto is jointly developed by Bayer and Johnson & Johnson. The drug is marketed by Johnson & Johnson in the U.S. and by Bayer outside the U.S. Xarelto is approved for several indications including stroke prevention in nonvalvular atrial fibrillation, deep vein thrombosis (DVT.V), pulmonary embolism (PE) and reduction of the risk of recurrent DVT and PE.

Our Take

We are encouraged by the label expansion initiatives. Xarelto has been putting in an impressive performance since its launch. The drug, an important one at Bayer’s newly approved drugs portfolio, contributed €381 million in the second quarter of 2014. Further label expansion of the drug will boost sales.

However, we remain sceptical about Xarelto’s ACS indication. In spite of several attempts to get Xarelto approved for the indication, Barer and Johnson and Johnson have repeatedly encountered failures. Xarelto has received multiple complete response letters related to the ACS indication, the latest being issued in Feb 2014.

Bayer carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Allergan (AGN) and Gilead Sciences Inc. (GILD). Both stocks sport a Zacks Rank #1 (Strong Buy).

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