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CHMP Positive on Bayer's Xarelto

Zacks Equity Research

Bayer’s (BAYRY) HealthCare segment recently received a positive recommendation from the European Committee for Medicinal Products for Human Use (CHMP) for Xarelto (rivaroxaban) in combination with standard antiplatelet therapy.

Bayer is looking to get Xarelto’s label expanded for the prevention of atherothrombotic events (myocardial infarction, cardiovascular death or stroke) after an acute coronary syndrome (:ACS) in adults having elevated cardiac biomarkers.

A final decision from the European Commission on the approval of the new indication of Xarelto is expected soon. We note that though the European Commission is not bound to follow the CHMP’s decision, it generally does so.

Xarelto was studied in the phase III ATLAS ACS 2-TIMI 51 study. Results from the study showed that Xarelto along with standard antiplatelet therapy significantly reduced cardiovascular death, myocardial infarction or stroke in patients after an ACS in comparison to those who received standard antiplatelet therapy alone.

Xarelto is marketed by Johnson & Johnson (JNJ) in the US and by Bayer outside the US.

We note that Xarelto is already approved for several indications in the US including stroke prevention in nonvalvular atrial fibrillation, deep vein thrombosis (:DVT), pulmonary embolism (:PE) and reducing the risk of recurrent DVT and PE. The drug performed impressively last year. In 2012, Xarelto sales increased 265.9% year over year to €322 million (approximately $414.1 million).

Earlier this month, Bayer and Johnson & Johnson received a huge setback with the US Food and Drug Administration (:FDA) issuing a second complete response letter (CRL) for the supplemental New Drug Application (sNDA) for Xarelto (2.5 mg twice daily) for the reduction of the risk of secondary cardiovascular events in patients suffering from ACS.

A second CRL from the US regulatory body is a huge disappointment for the company. Bayer, a large cap pharma company, currently carries a Zacks Rank #4 (Sell). Meanwhile other large cap pharma stocks such as Novo Nordisk (NVO) and AbbVie Inc. (ABBV) are better positioned carrying a Zacks Rank #2 (Buy).

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