Warfarin's Loss is Johnson & Johnson's Gain

Warfarin has long been doctor's go-to medicine for guarding against blood clots in post-operative or cardiovascular disease patients. However, an important shift that began in 2010 is having a profound effect on warfarin's dominance -- the approval of a new class of anticoagulants.

The first of these new drugs to win FDA approval was Boehringer's Pradaxa. That drug quickly reached billion-dollar blockbuster sales as doctors embraced the opportunity to distance themselves from warfarin's side effects.

The second wave of this treatment tidal shift came with the 2011 approval of Johnson & Johnson's (NYSE: JNJ  ) Xarelto, a Factor Xa drug that works in a completely new way.

As a result, Xarelto is displacing both warfarin and Pradaxa, and in the process is driving significant revenue growth for J&J.

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Longing for change
Warfarin was developed 50 years ago, and the drug has some significant drawbacks. Patients require regular monitoring and dose adjustment, and warfarin can interact with a variety of common foods including leafy vegetables. Most importantly, warfarin carries a risk of brain hemorrhage, which although uncommon can prove deadly.

As a result, doctors eagerly anticipated new treatment options such as Xarelto and the more recently FDA-approved Eliquis, which is co-marketed by Bristol-Myers Squibb  (NYSE: BMY  ) and Pfizer (NYSE: PFE  ) .

Both Xarelto and Eliquis are Factor Xa inhibitors. That means they work differently than warfarin, which blocks vitamin K, an important clotting factor. That brings me back to those leafy vegetables. Since they're high in vitamin K, they counteract warfarin.

Instead of blocking vitamin K, Xareleto and Eliquis reduce the production of the Factor Xa enzyme that contributes to thrombin production, a key cog in blood coagulation.

While the new class of drugs has quickly won script market share, it does come with one major drawback, which I'll get to in a bit.

Growing market demand
Both Xarelto and Pradaxa (which works differently than Xarelto and Eliquis) have already become blockbusters. However, it's Xarelto's rapid rise that is particularly intriguing.

Johnson & Johnson included the accompanying chart in its fourth-quarter earnings presentation, which shows that Xarelto is winning scripts from warfarin and Pradaxa.

As a result, sales of Xarelto eclipsed $270 million in the fourth quarter. That was up from $95 million the year before and $246 million in the third quarter. Overall, sales of Xarelto totaled $864 million in 2013, up from just $239 million in 2012.

That momentum carried over into the first quarter, with Xarelto sales growing to $319 million, double the amount from a year ago. 

For comparison, while we don't have Pfizer and Bristol's first-quarter results yet, sales of Eliquis totaled just $71 million in the fourth quarter.

Big challenges
Bristol and Pfizer will report Eliquis first-quarter sales on April 29; if the fourth quarter is any indication, Eliquis should put up solid growth. The two companies reported that Eliquis had sales of just $12 million in the second quarter, which means that Eliquis revenue grew nearly 500% between June and the end of December.

However, it isn't just Eliquis that may be holding back Xarelto's sales. That one significant drawback I mentioned earlier is the absence to date of an antidote to Factor Xa inhibitors such as Xarelto and Eliquis.

Although significant bleeding events occur less frequently when taking Factor Xa drugs instead of warfarin, they do happen. And since there isn't an effective antidote that reverses their ability to prevent clots, doctors may be shying away from their use, particularly in frail patients.

That suggests investors should probably pay more attention to Portola (NASDAQ: PTLA  )  than to Eliquis when it comes to Xarelto sales.

Portola is working on an antidote for both Xarelto and Eliquis that could significantly expand the use of those drugs, particularly in patients most at risk for bleeding. If successful, Portola's antidote should also counteract a new Factor Xa-inhibiting drug from Daiichi Sankyo that the FDA is considering for approval.

Fool-worthy final thoughts
Portola is developing its own factor Xa inhibitor, which means the company could someday compete directly against Xarelto. How that dynamic will play out remains to be seen, but it should be interesting. Investors interested in learning more about Portola should check out fellow Fool Max Macaluso's recent interview with the company's CEO.

For now, Johnson & Johnson's Xarelto appears to have surpassed Pradaxa and remains well ahead of Pfizer and Bristol's Eliquis. Given that warfarin remains the market share leader, there should be plenty more growth ahead, especially if an antidote can be developed.

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  • Report this Comment On April 21, 2014, at 3:01 PM, dbtuner wrote:

    I'm on Warfarin. It's been around for 50 years. Dr's know everything there is to know. Why switch to some new drug where the long term effects are still unknown? Not to mention Warfarin costs me about $3/month

  • Report this Comment On April 21, 2014, at 7:21 PM, PaulMolinaro wrote:

    The prescription drug Pradaxa (dabigatran etexilate mesylate) is a medication which has been prescribed to hundreds of thousands of patients to thin their blood thereby reducing the risk of stroke and blood clots when they have certain underlying heart disease such as atrial fibrillation or heart valve problems, but not artificial heart valves. On December 19, 2012, the United States Food and Drug Administration issued the following Safety Communication about Pradaxa: “The U.S. Food and Drug Administration (FDA) is informing health care professionals and the public that the blood thinner (anticoagulant) Pradaxa (dabigatran etexilate mesylate) should not be used to prevent stroke or blood clots (major thromboembolic events) in patients with mechanical heart valves, also known as mechanical prosthetic heart valves. A clinical trial in Europe (the RE-ALIGN trial) was recently stopped because Pradaxa users were more likely to experience strokes, heart attacks, and blood clots forming on the mechanical heart valves than were users of the anticoagulant warfarin. There was also more bleeding after valve surgery in the Pradaxa users than in the warfarin users.”

    Coumadin (Brand names include Warfarin, Jantoven, and Uniwarfin) has been on the United States market since about 1954. This well-known anticoagulant continues to be commonly prescribed to patients who are at risk of blood clots which can lead to serious consequences such as stroke and death. While Coumadin has been time-tested and proves itself to be quite effective, and relatively safe (“safe” based on a risks and benefits analysis which considers the serious consequences of not anticoagulating patients at high risk of clotting). To maintain safety while taking Coumadin, a patient must allow blood levels to be tested about every three months (to make sure there is not too much or too little in a patient’s system) and avoid foods which contain Vitamin K (such as many leafy green vegetables) which can render coumadin ineffective. Failure to take coumadin exactly as prescribed and to monitor coumadin levels can lead to uncontrolled bleeding which if not treated emergently can cause a patient to bleed to death. Fortunately, there are several antidotes to coumadin toxicity – all of which are commonly available to healthcare professionals. Antidotes include injectable Vitamin K, plasma (fresh frozen or cryosupermatant plasma), prothrombin complex concentrates, and recombinant factor VIIa.

    One of the big “selling” points for Pradaxa as opposed to coumadin is that the patient taking Pradaxa does not have to submit himself or herself to regular blood draws and dietary restrictions. What promoters of Pradaxa conveniently do not tell physicians and patients is that there is no commonly available antidote for a Pradaxa overdose. Thus, should a patient’s Pradaxa levels reach a toxic level, he or she has a good chance of bleeding to death while physicians watch helplessly. Pradaxa levels are effected by advanced age, renal (kidney) function, extremes in body weight, and drug-drug interactions (aspirin, ibuprofen, nonsteroidal antiinflammatory drugs, and many other drugs commonly used by patients). In addition, should a patient on Pradaxa require emergency surgery (as a result of a motor vehicle accident, for example), he or she will be subject to uncontrolled bleeding and have a poor chance of successfully undergoing surgery. According to the National Center for Biotechnology Information, “In early 2013, there is still no routine coagulation test suitable for monitoring these patients; specific tests are only available in specialized laboratories. In early 2013 there is no antidote for dabigatran, rivaroxaban or apixaban, nor any specific treatment with proven efficacy for severe bleeding linked to these drugs. Recommendations on the management of bleeding in this setting are based mainly on pharmacological parameters and on scarce experimen-Haemodialysis reduces the plasma concentration of dabigatran, while rivaroxaban and apixaban cannot be eliminated by dialysis.”

    In the last few years, several thousand patients, who have suffered serious injuries including death, have sued Boehringer Ingelheim Pharmaceuticals, Inc., the manufacturer of Pradaxa for failing to warn patients and their physicians about the serious adverse events that may result from taking Pradaxa. Many of these suits also allege that Boehringer promoted Pradaxa as being safer than coumadin.

    If your physician has prescribed Pradaxa for you, you should immediately discuss whether there are safer alternative drugs for you. After weighing the risks and benefits, you and your physician can determine what drug is best for you. If you have taken Pradaxa, and have suffered uncontrollable bleeding, you should consult with an attorney.

    - Paul

    Paul J. Molinaro, M.D., J.D.

    Attorney at Law, Physician

  • Report this Comment On April 22, 2014, at 11:54 AM, jpanspac wrote:

    Paulmolinaro,

    You've got the names mixed up. Warfarin is the generic name, and Coumadin is a brand name. If you can't even get that basic fact right it undermines the credibility of the rest of your post.

  • Report this Comment On April 22, 2014, at 8:08 PM, PaulMolinaro wrote:

    jpanspac, You are correct... and I should use more care with the cut and paste functions... fortunately, the main point of my post is the dangers of Pradaxa and stressing of the need to discuss risks and benefits with one's physician and not my Internet posting skills.

    - Paul

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