After the management reported that the U.S. Food and Drug Administration granted approval for its anticoagulant-reversal antidote, AndexXa, shares of Portola Pharmaceuticals (NASDAQ:PTLA) jumped by 25.6% on Friday.
Portola Pharmaceuticals' AndexXa acts as a decoy for a class of anticoagulants called factor Xa inhibitors that are increasingly being used in place of Warfarin to prevent stroke, pulmonary embolism, and venous thromboembolism (VTE).
AndexXa has been in development for years, and today's FDA approval was far from guaranteed given that the regulator previously rejected its approval in August 2016, citing a need for more data demonstrating its ability to reverse factor Xa inhibitory activity.
Portola Pharmaceuticals resubmitted AndexXa's application for approval last year; however, the prospects for an approval dimmed in December when the FDA pushed back its approval decision date by 90 days so that it could review interim data from Portola Pharmaceuticals' ongoing Anexxa 4 study.
AndexXa's approval is significant because there are over 100,000 hospital admissions and 2,000 deaths in the U.S. per month because of bleeding events in patients taking factor Xa inhibitors. The approval provides healthcare providers with the first medicine that's specifically designed to restore clotting in these patients, so there's a good chance that demand will ramp quickly for it.
The approval is the second green light that Portola Pharmaceuticals has received in the past year. The first approval was for Bevyxxa, a factor Xa anticoagulant that won FDA approval as an alternative to Lovenox for use in adult patients hospitalized for an acute illness.
Bevvyxa only launched in January, so it remains to be seen if it will be a commercial success, but there's reason for optimism. The market share-leading factor Xa inhibitors, Xarelto and Eliquis, generate a combined $5 billion per year in sales and, prior to losing its patent protection, Lovenox generated sales greater than $2 billion annually.
AndexXa's approval to reverse the effects of drugs like Xarelto and Eliquis could translate into hundreds of millions of dollars or more in annual sales, so combined, Portola Pharmaceuticals' two drugs have the potential to turn it into a much larger company. Given that opportunity, adding Portola Pharmaceuticals shares to portfolios could be savvy.
Todd Campbell owns shares of Portola Pharmaceuticals. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.