Technically, sanofi-aventis' (NYSE:SNY) and Bristol-Myers Squibb's (NYSE:BMY) Plavix doesn't have a monopoly on the blood-thinning market, but it's pretty darn close. The companies racked up $8.6 billion in sales last year because the drug works so much better than competitors such as cheaper, generically available warfarin.
That near-monopoly is getting thinned out, though. Earlier this year, the Food and Drug Administration approved Eli Lilly (NYSE:LLY) and Daiichi Sankyo's Effient, which has proven better in the clinic -- albeit with a less advantageous side-effect profile, including some excessive bleeding.
Now it looks like AstraZeneca (NYSE:AZN) is moving to capture its own slice of that multi-billion market with its blood thinner Brilinta. Phase 3 data released yesterday showed that Brilinta caused a 16% reduction in the chance of a cardiac event, such as a heart attack or stroke, compared to Plavix. Better yet, the level of major bleeding was about the same as that seen in patients taking Plavix. However, Brilinta did have some of its own side effect issues, including shortness of breath.
The bigger problem for Effient and Brilinta is that Plavix's U.S. patent ends in 2012. Even if doctors and patients are convinced that the drugs work a bit better than Plavix, the difference might not be great enough for the new entrants to compete well against a soon-to-come low-price generic competitor. Pfizer's (NYSE:PFE) Lipitor has seen slumping sales since Merck's (NYSE:MRK) Zocor went generic. With the rising cost of health, the problem of indirect generic competition is only going to get worse.
Brilinta also has to be taken twice a day compared to Plavix's once-a-day formula. The effect that convenience has on drug choice shouldn't be underestimated.
Even with those factors working against it, getting stellar trial results is still a big win for AstraZeneca. The drugmaker doesn't really need to capture all of the blood thinner market; if it takes just an eighth of Plavix's market, it'll still have a blockbuster on its hands.
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is a recommendation of the Inside Value newsletter. The Fool has a disclosure policy.
