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Xarelto ACS Panel Votes 'No'; Limited Impact On JNJ

 May 25, 2012 02:21 PM

(By Mani) The Cardiovascular and Renal Drugs Advisory Committee of the U.S. Food and Drug Administration have not recommended Xarelto for acute coronary syndrome (ACS). However, the event would have little impact on Johnson & Johnson Co. (NYSE:JNJ)

Xarelto (rivaroxaban) is a novel oral anticoagulant (factor Xa inhibitor), jointly developed by JNJ/Bayer. JNJ holds US rights with Bayer co-promoting in the hospital and specialty markets.

The voting members of the committee has cited concerns about the majority of issues that were brought up in the briefing documents.

"We believe trial bias was the most common theme brought up in discussions. The voters expressed frustration over withdrawal of consent, incomplete follow-up, missing data, and uncounted deaths," RBC Capital Markets analyst Glenn Novarro wrote in a note to clients.

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In addition, the voters questioned the integrity of data, which was based on a method of analysis called modified intent-to-treat, or mITT (on-treatment plus 30 days). The voters felt that deviations from the design protocol (ITT) can confound the data.

On the efficacy front, the conclusion was that the rate of cardiovascular mortality does not support a mortality claim on the label. On safety, increased risk of bleeding (particularly life threatening bleeds), stroke, and intracranial hemorrhage were of main concern in the post-vote discussions.

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However, Xarelto had been approved for other indications. Xarelto is approved in the U.S. to reduce the risk of blood clots in the legs and lungs of people who have just had knee or hip replacement surgery. Xarelo has been approved to reduce the risk of both hemorrhagic and thrombotic strokes as well as other blood clots in people with atrial fibrillation not caused by a heart valve problem.

The final decision on Xarelto for ACS will be made on June 29, and an approval is unlikely. However, the rejection would have only a limited impact on J&J as the ACS indication would fetch only around $30 million in revenues. Analyst Novarro expects JNJ to generate $200 million from sales of Xarelto in the U.S., while the consensus estimates are in the range of $130 million to $300 million.

"We estimate that an ACS indication would add roughly $20–25M of sales for 2012. A final rejection in June would serve as an incremental negative headline. However, from a top-line point of view, we believe the impact on JNJ would be immaterial," Novarro noted.



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