CHMP Positive on Bayer's Riociguat

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The European Committee for Medicinal Products for Human Use (CHMP) has issued a positive opinion on the approval of Bayer’s (BAYRY) riociguat in two forms of pulmonary hypertension.

Bayer is looking to get riociguat approved in the EU for the treatment of persistent/recurrent chronic thromboembolic pulmonary hypertension (:CTEPH) following surgical treatment or inoperable CTEPH to improve exercise capacity. The company is also looking to get riociguat approved for the treatment of adults suffering from pulmonary arterial hypertension (PAH) to improve exercise capacity.

A final decision from the European Commission on the approval of riociguat is expected by Jun 30, 2014. The regulatory submission in the EU for riociguat for both the indications was made in Feb 2013.

The CHMP’s opinion on riociguat was based on positive results from two global phase III studies − CHEST-1 and PATENT-1. Both studies met their primary objectives. Riociguat was generally well tolerated in patients suffering from PAH and CTEPH in both these studies with no unexpected adverse effects being reported.

We note that riociguat is already approved in the U.S. under the trade name Adempas for both the indications. Adempas is also approved in Japan, Canada and Switzerland for the CTEPH indication.

We believe riociguat’s approval in the U.S. and EU will strengthen Bayer’s cardiovascular portfolio. However, the pulmonary hypertension market looks extremely competitive with the presence of companies like Actelion Ltd. (ALIOF) and Gilead Sciences Inc. (GILD).

We are encouraged by the string of positive news from Bayer’s HealthCare segment over the last few quarters. We expect the segment to continue to drive growth at the company in the coming years.

Bayer, a large-cap pharma company, presently carries a Zacks Rank #3 (Hold). A better-ranked stock in the large-cap pharma sector is Allergan (AGN). The stock carries a Zacks Rank #2 (Buy).

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