Johnson & Johnson's Xarelto Loss is AstraZeneca PLC (ADR)'s Gain

WIth another competitor out of the way, AstraZeneca has a big market share opportunity.

Feb 21, 2014 at 2:00PM

AstraZeneca (NYSE:AZN) can breathe a sigh of relief for its anticoagulant Brilinta, again. About 3 years ago, partners Bristol-Myers Squibb (NYSE:BMY), and Pfizer (NYSE:PFE) halted an acute coronary syndrome (ACS) trial with blood thinner Eliquis due to increased bleeding risks. More recently, the FDA refused Johnson & Johnson's (NYSE:JNJ) Xarelto for the same indication, for the third time. With these big names out of the way, there's an even better chance that Brilinta can become a significant growth driver for AstraZeneca in the years ahead.

A tale of two markets
Since its approval, AstraZeneca's Brilinta has steadily gained ACS market share, but growth has been somewhat lopsided in favor of the EU. Some of the lopsidedness can be explained by timing. Brilinta won EU approval for prevention of thrombotic events in patients with acute coronary syndrome in March 2010. The FDA approved it for the same indication a year and four months later. Sales of the blood thinner more than doubled during 2013 to $283 million, with the lion's share coming from the EU.

In the US sales were just $73 million or about 26% of the year's total. During the company's latest earnings call, management attributed the lower US sales figures to an ongoing investigation by the Department of Justice. There are some concerns about data from the Plato trial that was largely responsible for the drug's approval. You'll want to keep your eyes open for more news about the investigation.

Expansion opportunities
The ACS indication represents roughly 20% of the total market for an anti-coagulant. While Brilinta might be able to reach blockbuster status with just the one indication, there is a huge incentive to expand. Prior to losing patent exclusivity, Bristol-Myers sold a whopping $7 billion worth of Plavix in 2011. With a bit of luck, AstraZeneca could reach those heights as well.

Brilinta is currently in several phase 3 outcomes studies that could more than triple its available market. An acute ischemic stroke study that compares it to asprin should be finished next year. For peripheral artery disease (PAD), it is going up against Plavix. Data from this three year Euclid study should be ready in early 2016. Brilinta caused bleeding events at nearly the same rate as Plavix in the ACS study that led to its approval. It stands to reason that bleeding events should occur at about the same frequency during this trial. With safety data out of the way it seems an expansion into PAD is up to efficacy data.

A strong foothold
For now it seems that Brilinta has the ACS market for next-generation blood thinners sewn up. Pfizer and Bristol-Myers' blood thinner Eliquis took a shot at the stroke prevention indication and missed. The Appraise-2 trial was terminated early due to safety concerns based on bleeding events among patients with ACS.

Earlier this month, Johnson & Johnson received a complete response letter from the FDA for Xarelto. This was the third rejection for the otherwise successful blood thinner with regard to the ACS indication. In January, an advisory committee citing a lack of sufficient trial data, voted unanimously against its approval. It is possible, but to my mind highly unlikely, that Johnson & Johnson will decide to generate more data and take a fourth shot. In the meantime it looks like AstraZeneca can take a breather.

Slow going
Despite having a lack of other next-generation anticoagulants cleared for ACS, Brilinta's uptake has been curiously slow. For now it seems Plavix, or clopidogrel, is still the go-to drug for ACS. Generic versions of the superstar hit the market in the first half of 2012. Although Brilinta was significantly better than Plavix at reducing cardiovascular events, it wasn't a giant leap forward. During the Plato trial, the Brilinta group showed a 9.8% incidence rate versus Plavix's 11.7%. That might be statistically significant, but probably not enough of an improvement to motivate health care providers to quickly switch to a more expensive branded drug.

Final thoughts
With competition from Xarelto and Eliquis out of the way, it looks like AstraZeneca could be the only next generation blood thinner in the US market approved for ACS for a while. Unfortunately, the DoJ investigation into the Plato trial could bring it all crashing down. Investigations aside, acceptable safety data from Brilinta is encouraging, and leads me to believe more indications, and billions in revenue, for this anticoagulant are on the way.

Tired of the ups and downs in the financial markets?
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Cory Renauer has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers