Johnson & Johnson (JNJ) and Bayer AG (BAYN)’s Xarelto pill won U.S. approval for orthopedic-surgery patients today, expanding the blood thinner’s presence in a market to block clots expected to reach as much as $15 billion annually.
The Food and Drug Administration cleared Xarelto as an alternative for preventing blood clots in patients after hip or knee surgery, the companies said today in a statement.
The decision is the first of a pair of rulings expected this year on Xarelto, also known as rivaroxaban, as Bayer and J&J vie for the larger market in patients with an irregular heartbeat that can lead to stroke. The FDA will probably decide on the medicine’s use for the bigger patient group by the end of 2011, Martin Fitchet, head of J&J’s cardiovascular research, said at a May 26 conference with analysts.
“Shorter hospital stays following hip and knee replacement have made prevention of venous blood clots” a concern for patients, said Paul Chang, a vice-president for J&J’s Janssen Pharmaceuticals unit, in the statement. “Xarelto provides a safe and effective oral treatment option.”
The drug will help protect the more than 800,000 U.S. patients who undergo hip and knee surgeries annually and run the risk of developing potentially fatal clots, the companies said.
J&J, based in New Brunswick, New Jersey, has U.S. rights to the medicine. Bayer, with headquarters in Leverkusen, Germany, sells the drug in Europe, where the treatment won approval in 2008 for use by hip- and knee-surgery patients.
Johnson & Johnson rose 78 cents, or 1.2 percent, to $67.30 at 4:15 p.m. in composite New York Stock Exchange trading, its best performance in a month. Bayer climbed 23 cents to 55.67 euros at the close of Frankfurt trading earlier today.
Bayer has forecast Xarelto will generate more than 2 billion euros ($2.9 billion) in annual sales once its wider use is approved in patients with an irregular heartbeat known as atrial fibrillation. The pill may compete with medicines made by Boehringer Ingelheim GmbH, Pfizer Inc. (PFE) and Bristol-Myers Squibb Co. (BMY) in the markets for preventing clots in patients who have joint replacement surgery, irregular heartbeat or are critically ill and bed-ridden.
J&J, the world’s second-biggest seller of health-care products, has been “waiting for a blockbuster” in the cardiovascular-drug market and Xarelto “is widely viewed as that product,” Matthew Dodds, a Citigroup analyst who covers the company, wrote in a May 27 note to clients.
In the U.S., Xarelto may generate as much as $1.6 billion in annual sales, Dodds said. That includes $100 million for the use approved today, treating the 1.2 million Americans who have hip and knee surgery annually, he said. By comparison, Xarelto may generate $1.2 billion from treating the 2.5 million Americans with atrial fibrillation, Dodds wrote.
Boehringer, the world’s biggest family owned drugmaker based in Ingelheim, Germany, beat J&J and Bayer to the U.S. and European markets for irregular heartbeat patients last year with Pradaxa, the first pill to replace the half-century-old blood thinner warfarin. In Europe, Pradaxa won the backing of regulators for that group of patients in April.
By May, Pradaxa accounted for 5 percent of U.S. blood- thinner prescriptions, according to Dodds. Xarelto is taken once a day, compared with twice a day for Pradaxa, a convenience that may make it more attractive, he said.
Pradaxa’s success is “a confirmation that there is significant unmet medical need, and a willingness of clinicians to try to get to a better standard of care,” said Joaquin Duato, J&J’s worldwide co-chairman for pharmaceuticals, at the May 26 conference. “So I think it bodes very well for rivaroxaban.”
Apixaban from Bristol-Myers and Pfizer, the top seller of health-care products, may be better than Xarelto at stroke prevention, based on a summary of trial data released last month, Larry Biegelsen, a Wells Fargo & Co. analyst in New York, said in a June 22 note to clients.
Apixaban was more effective and caused less major bleeding than warfarin, the New York-based companies said in a statement that day. Full details of their trial won’t be released until the European Society of Cardiology’s meeting in August, they said.
In a comparable trial, Xarelto didn’t show it was superior to warfarin, Biegelsen said.
A third application, to market Xarelto to prevent blood clots in immobilized patients in the hospital, may be delayed past 2011 because of study data that suggested the medicine may raise the risk of bleeding, according to Fitchet.
Xarelto is the 19th novel medicine approved by the FDA so far this year. The agency may match the 2004 record of 36 new drug approvals, the most since at least 2001, according to FDA records. Twenty-one drugs were cleared last year.