Despite winning Food and Drug Administration (FDA) approval for two highly anticipated drugs targeting big market opportunities, Portola Pharmaceuticals (NASDAQ:PTLA) is struggling to make the jump from clinical-stage to commercial-stage company. Its first approved drug, Bevyxxa, has failed to establish itself as an anticoagulant alternative to generic Lovenox in the post-acute care setting, and it's only early days for Andexxa, the company's anticoagulant reversal drug. Here's how Portola Pharmaceuticals plans to kick-start its business.

A company in transition

A factor Xa inhibitor that won FDA approval to prevent clots in seriously ill patients following hospitalization, Bevyxxa is an oral, once-daily alternative to Lovenox, an anticoagulant dosed by infusion that had peak annual sales over $2 billion prior to losing patent protection.

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Bevyxxa patients experienced fewer clotting-related events leading to hospitalization and death due to clotting than Lovenox patients in clinical trials, but Bevyxxa's adoption by hospitals since its launch in January 2018 has fallen far short of predictions. In Q3, the company reported negative net product revenue of $552,000 for Bevyxxa because of returns due to product expiration.

That's incredibly disappointing given that this drug targets a billion-dollar indication. Fortunately, Bevyxxa isn't Portola Pharmaceuticals' only approved drug. The company also won FDA approval of Andexxa, a factor Xa antidote, in May 2018, and thankfully its performance so far is much better. In the third quarter -- its first full quarter on the market -- Andexxa revenue was $7.7 million.

Bevyxxa's lackluster launch is likely one reason why longtime CEO Bill Lis announced his retirement in May, and why interim management decided to shift resources away from Bevyxxa to Andexxa in August. Scott Garland, an industry veteran who previously held executive positions at Genentech, Exelixis, and Relypsa, officially took over as CEO on Oct. 8.

A shift in strategy

On Nov. 7, Garland held his first earnings conference call with investors, and in it, he explained Portola Pharmaceuticals' new strategy.

For Bevyxxa, the company has identified "centers of excellence," a small group of hospitals it plans to use as a testing ground to develop strategies it can use to win placement on other hospital formularies. This retrenchment will allow Portola Pharmaceuticals' cash stockpile to last into 2020, but don't expect any bump up in Bevyxxa's sales, because management's guiding for Bevyxxa sales to remain at current levels throughout 2019. 

The future appears brighter for Andexxa, which is used to reverse the anticoagulation effects of Xarelto and Eliquis, two factor Xa therapies that are increasingly being prescribed instead of warfarin. Factor Xa inhibitors generate billions of dollars in sales annually, and approximately 140,000 of the 4 million people taking them are admitted to hospitals because of bleeding every year. 

So far, Garland says over 100 hospitals have ordered Andexxa, and 40% of those hospitals have ordered more units. Portola Pharmaceuticals is hiring more salespeople to call on additional hospitals based on that performance.

What's next

The FDA is scheduled to make a go/no-go decision on a next-generation manufacturing process that will allow the company to produce Andexxa at scale on Dec. 31. Similarly, the Committee for Medicinal Products for Human Use (CHMP), an advisory committee to European regulators, is anticipated to issue its recommendation on this second-generation manufacturing process in December, too.

If regulators give it an OK, the company will be able to produce enough Andexxa to fulfill demand beyond the 100 hospitals it's currently working with. Initially, its sales team will target about 600 U.S. hospitals that are Level I or Level II trauma centers or that have a comprehensive stroke designation. Afterward, it will call on an additional 900 hospitals that have advanced stroke center designation.

The decision on Andexxa is critical to driving sales higher in 2019, but that's not the only news that could move Portola Pharmaceuticals shares in December. Investors will also get insight into Portola Pharmaceuticals' cerdulatinib next month. Cerdulatinib is a spleen tyrosine kinase (Syk)/Janus kinases (JAK) inhibitor being developed to treat blood cancers, including peripheral T-cell lymphoma, or PTCL, and cutaneous T-cell lymphoma, or CTCL -- both of which are tough-to-treat cancers with limited available treatment options. 

The FDA granted cerdulatinib orphan drug designation for PTCL in September, and on Dec. 3, the company is presenting interim phase 2 study data at the American Society of Hematology (ASH) meeting in San Diego. In their presentation, researchers will offer up insight into duration of response and how cerdulatinib affects cutaneous and nodal lesions.

There's reason to be optimistic about cerdulatinib. Portola Pharmaceuticals says "feedback from the FDA," plus data so far, could allow it to win accelerated approval in some specific tumor subtypes. Management's going to sit down with the FDA in the first quarter of 2019 to discuss its phase 2 data, and afterward it will update investors on its development strategy.

Overall, Portola Pharmaceuticals has a lot of work in front of it. It still needs to figure out what, if any, commercial opportunity exists for Bevyxxa, and it needs to demonstrate that Andexxa demand won't falter. It also needs to figure out how best to go forward with cerdulatinib. It has enough cash to buy it time to execute its plans, but the clock is ticking for investors who've been disappointed by the company so far.

Todd Campbell owns shares of Portola Pharmaceuticals. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Exelixis. The Motley Fool has a disclosure policy.