More Than Promising Results for New Heart Drug (BMY, PFE, JNJ, BAYRY, DSKYY, PPH)

A new heart drug aimed a reducing the risk of strokes has outperformed the current drug of choice, warfarin, in a study that shows it lowers risk from a type of arrhythmia by 21% and lowers bleeding by 31%, a serious side effect of warfarin. The study was sponsored by Bristol-Myers Squibb Co. (NYSE: BMY) and Pfizer Inc. (NYSE: PFE) and poses the latest threat to the dominance of warfarin as a blood anti-coagulant.

There are other drugs in various stages of development as well, and could generate up to $5 billion annually for Bristol-Meyers and Pfizer when the drug is approved. Competing drugs include Pradaxa, from Germany’s Boehringer Ingelheim, which was approved for use last year, Rivaroxaban from Johnson & Johnson Co. (NYSE: JNJ) and Bayer AG (OTC: BAYRY), Edoxaban from Japan’s Daiichi Sankyo (OTC: DSKYY), and Betrixaban from privately held Portola Pharmaceuticals.

The new drug, called apixaban, is competing directly with Pradaxa (dabigatran) as a treatment for stroke prevention due to a condition known as atrial fibrillation. Over 10 million people in the US and Europe are affected by the condition.

And even though apixaban appears at this stage to be more effective than Warfarin, cost will play a role in how widely the drug is eventually used. According to the Wall Street Journal, Pradaxa costs $6.75 a day for its twice-daily dose, compared to just pennies for generic warfarin.
The number of competing products could keep the cost down, but there’s no question that the new drugs will be very much more expensive.

The study is good news for Pfizer, which will soon lose patent protection on its Lipitor cholesterol drug, and Bristol-Meyers, also set to lose patent protection on its best-selling blood thinner Plavix. Pfizer’s world-wide revenue from Lipitor is nearly $11 billion, and Plavix hauls in nearly $7 billion annually for Bristol-Meyers.

Shares of Bristol-Meyers are up nearly 2% at mid-day today, at $29.28, near the top of the 52-week range of $24.97-$29.73. Pfizer shares are up more than 3.5%, at $18.86, in a 52-week range of $15.77-$21.45. Shares of the Pharmaceutical HOLDRs ETF (AMEX: PPH) are up nearly 2%, to $66.91, in a 52-week range of $60.11-$72.71.

Paul Ausick