Horse Race Flickr Paul

Source: Flickr user Paul

A race for dominance in the anticoagulant market is heating up between Bristol-Myers Squibb (NYSE:BMY) and Johnson & Johnson (NYSE:JNJ) with the winner standing to reap billions of dollars in additional revenue over the coming years.

Taking the lead?
The market for drugs that help blood travel more freely through a patient's body has long been dominated by the anticoagulant warfarin, but warfarin's decades long stranglehold on this big and growing market is coming to an end because new factor Xa targeting drugs launched by Bristol-Myers and J&J arguably work better, are easier to dose, and come with fewer side effects.

Until recently, the market share leading factor Xa inhibitor has been J&J's Xarelto, a drug that won FDA approval in 2011 as a treatment for deep vein thrombosis, or DVT, in patients undergoing knee and hip surgery and to reduce the risk of stroke in people with an abnormal heart rhythm. The drug has since won approval for use as a treatment to reduce the broader risk of DVT and pulmonary embolism. In 2014, Xarelto's sales reached $1.5 billion up 74% from 2013, but while that's impressive, investors shouldn't get too complacent with Xarelto's performance. In the second quarter, Xarelto's year-over-year revenue growth slowed to 30.7% in part because of rising use of Bristol-Myers Eliquis.

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Source: Bristol-Myers Squibb

Eliquis, which was co-developed by Pfizer, won FDA approval in late 2012 for use in reducing the risk of stroke, but it wasn't until the FDA agreed to expand Eliquis' label to include DVT, post hip and knee surgery clot prevention, and pulmonary embolism that Eliquis sales took off.

Approval in those indications put Eliquis squarely head-to-head against Xarelto and Eliquis could be winning the match.

In 2014, Eliquis sales soared to $774 million from $146 million in 2013 and in the second quarter, Eliquis net produce revenue surged to $437 million from $171 million a year ago. Eliquis' 155% year-over-year growth in the second quarter trounced Xarelto's -- albeit very respectable -- 30% growth.

Eliquis' arguably better prescribing label is one big reason why Eliquis' quarterly sales are catching up to Xarelto's. Although both Xarelto and Eliquis effectively inhibit factor Xa, only Eliquis is proven in clinical trials to reduce the risk of bleeding and the risk of stroke versus warfarin.

Looking forward
Xarelto's one-pill daily dosing remains an advantage over Eliquis' twice daily dosing, but that advantage may not be enough to keep Xarelto's quarterly sales out in front of Eliquis.

Regardless, there should be plenty of room for both Bristol-Myers and Johnson & Johnson to make money in this indication going forward. Industry experts estimate that spending on anticoagulants totals at least $10 billion per year and one of the major reasons that Xarelto and Eliquis sales aren't higher is because there has yet to be a drug approved that reverses their effect. However, that could soon change given that Portola Pharmaceuticals andexanet alfa has successfully reversed the effects of both Xarelto and Eliquis in trials. If andexanet alfa gets the go ahead from regulators, then it's hard to imagine that Xarelto and Eliquis won't be splitting a much bigger pie in a year or two. 

Todd Campbell has no position in any stocks mentioned. Todd owns the equity research firm E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool recommends Johnson & Johnson. 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.