Delayed, Reason Unknown

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No shocker here. Bayer and Johnson & Johnson (NYSE: JNJ) got a complete response letter from the Food and Drug Administration for their anticoagulant, Xarelto, yesterday.

OK, maybe it was a little shocking: The FDA actually responded on the PDUFA date. Considering the number of companies waiting for responses well after the FDA's goal, Bayer and Johnson & Johnson should be happy for the timely response, even if it was a rejection. Eli Lilly's (NYSE: LLY) still waiting for a response about prasugrel nearly a year after its first PDUFA date. And ViroPharma (Nasdaq: VPHM) is hoping to hear next week on an expansion to Cinryze's label.

In typical pharma fashion, J&J and Bayer didn't give any indication why the agency didn't approve Xarelto, but did say that no additional clinical trials would be necessary. The efficacy has never been in question, since it appears to work better than sanofi-aventis' (NYSE: SNY) Lovenox.

We can guess that the reason for the rejection probably had to do with safety concerns. While the advisory committee voted 15 to 2 in favor of recommending approval of the drug, the FDA briefing documents clearly showed that the agency had some concerns over liver damage potential and excessive bleeding. Since the FDA doesn't have to follow the advisory panel's recommendation, it's usually a good idea for investors to pay attention to the FDA's opinion in the briefing documents, as Dendreon's (Nasdaq: DNDN) investors are only too well aware.

As long as Bayer and Johnson & Johnson can answer the FDA's questions relatively quickly, it shouldn't affect the companies too much. They're currently trying to get Xarelto approved to prevent blood clots after surgery, but the big potential for Xarelto is in preventing strokes in patients with atrial fibrilation, a common form of irregular heartbeat. However, that's still a couple of years away from approval.

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