After Cangrelor, The Medicines Company Gets Priority Review for New Drug

After its anti-clotting agent Cangrelor was rejected by an FDA committee, The Medicines Company sets its sights on getting approval for skin infection drug oritavancin.

Feb 25, 2014 at 2:30PM

It at first you don't succeed, try again. The saying certainly describes The Medicines Company (NASDAQ:MDCO), as it regroups after the recent FDA advisory committee 2 to 7 vote against the approval of Cangrelor, used to prevent blood clots. The FDA is set to meet at the end of April, and while the committee's opinion can be disregarded, it appears unlikely that an approval will be granted. However, a new application for antibiotic drug oritavancin was given priority review status, with a decision expected by Aug. 6, 2014.

Cangrelor, if it's approved, faces stiff competition
The FDA committee recommended that numerous flaws found with Cangrelor's study be corrected before the drug is approved. Issues with the trial included its design, oversight, the data/safety monitoring board, and the ways in which efficacy and safety were counted. These issues have even led to a class action suit, where the company is being accused of making false and misleading statements about the Cangrelor trial. The Medicines Company shares have decreased 22% since January and, in light of recent events, I would not recommend the stock for investors with a low risk tolerance.

The company, which serves about 3,000 acute and intensive care hospitals, has four drugs on the market. If approved, late-stage drugs Cangrelor and oritavancin would join top seller Angiomax, along with Recothrom, Argatroban, and Cleviprix. The current product line contributed to a 16% rise in net revenue in the fourth quarter of 2013, while EPS for the period was down to $0.02 versus $0.38 for the same period in 2012.

Adding new drugs to its product line can help The Medicines Company boost its revenue, which appear to be rising at a much slower pace than its operating expenses.. If the unlikely approval of Cangrelor goes through, the drug will face stiff competition from other anticoagulants in the market, like Bristol-Myers Squibb's (NYSE:BMY) Plavix and AstraZeneca's (NYSE:AZN) Brilinta, as well as generics.

Bristol-Myers Squibb's cardiovascular segment is facing headwinds from generic competition, which is impacting sales of Plavix and its other cardiovascular therapies. To offset decreasing revenues, the company is seeking approval in the U.S. and Europe for additional indications of its heart defect drug Eliquis. Despite decreasing sales of Plavix, the company's deep pipeline helped propel growth during the fourth quarter of 2013 – skin cancer drug Yervoy, diabetes drug Onglyza/Kombiglyze, leukemia drug Sprycel and arthritis drug Orencia all had double-digit increases in sales.

AstraZeneca's Brilinta/Brilique product showed the second highest growth in revenues within the company's cardiovascular segment. Global sales of the drug during the fourth quarter were $92 million, up from $75 million in the third quarter of 2013. Brilinta does not have generic competition, and marketing exclusivity is set to expire in July 2016. During fiscal 2013, growth in Brilinta, the diabetes and respiratory segments, emerging markets, and Japan delivered $1.2 billion in revenue. Unfortunately the growth in these areas was offset by a reduction in revenues of $2.2 billion due to patent expirations.

What are the benefits of oritavancin versus the competition?
Oritavancin is an antibiotic currently in phase 3 testing and is meant for use in the prevention of skin infections in hospitals. It kills gram-positive bacteria, such as MRSA, and helps to prevent infections in hospital patients with open wounds and weak immune systems. Clinical trial data shows that oritavancin's effectiveness is similar to vancomycin across several types of bacteria. 

Vancomycin, which has been used in hospitals for years and for the same purpose, has drawbacks. Treatment, which is administered via catheter, can take several days and usually requires a hospital stay. Dosing of oritavancin is much simpler – it is administered once via catheter and the catheter is removed. In addition to vancomycin, the company can expect competition from others skin infection therapies that are also in late-stage trials.

My Foolish conclusion
While the vote by the FDA advisory committee against approving Cangrelor was a setback for The Medicines Company, it may find success with oritavancin. Craig Rubens, MD, commented on MedPageToday that obtaining FDA approval for drugs that treat skin infections seemed to be easier when compared to drugs prescribed for other indications . The drug's single dose treatment and its potential cost savings can be two attractive selling points for health care providers.

The Medicines Company forecasts that oritavancin should have peak sales of more than $400 million. An approval of the drug in August could boost the company's shares, currently trading at 16 times 2014 earnings. The company is busy growing its pipeline and at least four new products are expected between 2014 and 2018. Investors are encouraged to watch this stock for now, since the company has missed market EPS estimates in the past three quarters. 

Biotechs Battling Cancer

The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In the Motley Fool's brand-new FREE report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

Eileen Rojas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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

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, 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

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