Germany’s Bayer (BAYRY) received a huge boost when its blood thinner Xarelto (rivaroxaban), co-developed with Johnson & Johnson (JNJ), fared well in a pivotal, double-blind, late-stage study (n=14,264).
Data from the study, presented at the annual meeting of the American Heart Association, revealed that treatment with Xarelto was more effective than warfarin (the current standard of care) for the prevention of stroke and embolism in patients with an erratic heartbeat. This cardiac rhythm disorder is referred to as atrial fibrillation.
The randomized, double-blind study, known as ROCKET-AF (Rivaroxaban Once daily oral direct Factor Xa inhibition Compared with vitamin K antagonism for prevention of stroke and Embolism Trial in Atrial Fibrillation), also revealed that treatment with Xarelto did not increase bleeding compared to the standard therapy.
Bleeding is the major side-effect associated with warfarin. Bayer announced further that ROCKET AF is the seventh late-stage study to show consistently improved efficacy for Xarelto compared to standard of care.
The double-dummy parallel group outcomes study compared the efficacy of Xarelto (20 mg, or 15 mg for patients suffering from moderate renal impairment) with dose-adjusted warfarin in patients suffering from non-valvular atrial fibrillation. The patients stood the risk of suffering a stroke or non-CNS systemic embolism.
Moreover, Bayer’s candidate, already approved in the European Union (EU) for the prevention of venous blood clots in adults undergoing elective (planned) hip or knee replacement surgery, was well tolerated with the rate of opt-outs due to adverse events being similar to warfarin.
Positive results from the Rocket-AF study should boost the candidate’s chances of getting cleared in the US. We believe that if the blood-thinner is cleared in the US then it would be a further boost to Bayer’s top line since the candidate offers multi-billion dollar sales potential.
However, Xarelto would face intense competition in the anti-coagulant market. We note that Bristol-Myers (BMY)/Pfizer (PFE) are making rapid strides with the development of their late-stage candidate apixaban for the same indication as targeted by Xarelto. Moreover, the US Food and Drug Administration’s (FDA) approval of Boehringer Ingelheim’s Pradaxa (approved on October 19, 2010) has intensified competition in the market.
We recently upgraded Bayer to Outperform based on its strong third quarter 2010 results and the positive outlook maintained by the company. Our long-term stance is supported by a Zacks #2 Rank (short-term Buy recommendation) carried by the company in the short-run.
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