Similar efficacy and a better safety profile are allowing a new type of anticoagulants known as factor Xa inhibitors to capture billions of dollars in sales away from warfarin, a decades-old drug that requires frequent testing, dose adjustments, and dietary changes. Bristol-Myers Squibb (NYSE: BMY) and Pfizer, Inc.'s (NYSE: PFE) Eliquis is the top seller in this class of drugs, and in this clip from The Motley Fool's Industry Focus: Healthcare podcast, analyst Kristine Harjes is joined by Todd Campbell to update investors on the anticoagulant market and the opportunity ahead for these companies.
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This podcast was recorded on Feb. 15, 2017.
Kristine Harjes:Last topic of the day that we wanted to bring up are blood thinners. This is kind of a parallel story to the cholesterol story that we told at the beginning of the episode. There's a long-standing blood thinner called warfarin that's been used for decades as the predominant blood thinner, anticoagulant. But, there's a new class of drugs that are on the market called factor Xa inhibitors.
Todd Campbell: Yeah. This is a much-needed improvement over warfarin, in my view. warfarin has been the go-to drug in what's a $10 billion market since the '50s, maybe the '60s. To be able to go in and say, warfarin requires significant amounts of patient testing and dose adjustment and dietary restrictions because of the way it works -- we can talk about that in a second -- factor Xa inhibitors don't have those same drawbacks or requirements. As a result, doctors are increasingly gaining comfort with them and using them more and more and more. That's translating into billions of dollars in sales for the makers of these drugs: Johnson & Johnson, which makes Xarelto, and Bristol-Myers and Pfizer, which are teamed up on Eliquis.
Harjes: You mentioned warfarin's mechanism of action. Really, all it does is targets vitamin K, which prevents blood clots. When you mentioned a dietary change for some patients, that's to reduce vitamin K intake for the patient. As you mentioned, it's kind of an imperfect drug, despite having been used for a long time. So, when the factor Xa inhibitors came to market, it was a pretty big deal, and they're definitely picking up steam quickly.
Campbell: Think about that for a second -- the ability for warfarin to work is dependent on what you had to eat this past week. [laughs] So, yeah, you're looking for something that's going to be, potentially, the same efficacy, less patient burden, and in the case of Eliquis, potentially a better safety profile. As a result, Xarelto sales totaled $2.3 billion last year. That was up 22%. Eliquis sales totaled over $3 billion, and that was up 80%.
Harjes: Yeah, these companies are making a ton of money on these drugs. But, I think the important question to ask is which one has the advantage?
Campbell: In my view, Eliquis, obviously, is being prescribed at a much faster rate. It's growing much quicker, 80% to $3.3 billion is pretty remarkable growth. I believe that the reason behind that is, if you look at the studies that were done in evaluating Eliquis' ability to prevent clots, one of the things they looked at was the risk of bleeds. Because, obviously, if you're preventing blood clots, your blood is getting a little thinner, so if you nick yourself or whatever, theoretically, you could bleed. So, you have these bleeding events that can occur on drugs like warfarin, Xarelto, and Eliquis. Eliquis showed, in trials, that it works better than warfarin in reducing the number of bleeds. That's a huge potential safety advantage over these other drugs in the class. As a result, I think that's why this drug is gaining ground so much more quickly. And it's likely to continue to gain ground more quickly than the other factor Xa drugs that are coming to market.
Harjes: Yeah, I would agree. At the recent J.P. Morgan Healthcare Conference, the CEO of Bristol-Myers said that they are relatively close to nabbing the lead spot for total prescriptions rankings for this drug, Eliquis, which is already No. 1 in the institutional setting, meaning hospitals, etc, and also among cardiologists. In this scenario, it's also beating out warfarin.
Campbell: Which is fascinating. Think about how rapidly the use of these drugs has been, and warfarin still has huge market share.
Harjes: Yeah, they have 54% of patients are still on warfarin. But a large part of that is because no antidote currently exists and is approved for the factor Xa inhibitors, as opposed to warfarin which, surprise, you could just take vitamin K and it undoes it.
Campbell: Right. So, you don't want to use these factor Xa drugs, necessarily, in elderly patients who are frail and may be subject to falls, etc, until an antidote gets available. Maybe, Kristine, that's going to happen soon.
Harjes: Yeah, I was going to resist the temptation to talk about one of my favorite stocks on the show, but the conversation has led us there, so I'll just quickly throw it out there that Portola Pharmaceuticals, if you haven't already heard me talk about this stock, is working on developing exactly that antidote.
Campbell: Right. And we don't know if or when it would get approved, but the FDA is considering it. I think a resubmission of the application. If you go back and listen to our shows in the past, we talked about this. But, it would, obviously, be a very big advance for doctors and patients, and it would probably expand the use of these drugs like Eliquis significantly, because now it could get used in more and more patients.
Harjes: Right. And Todd, I know you've written a bunch of articles about this entire market. I have written one or two myself. Listeners, if you're curious, I'm happy to send them to you. Just shoot us an email at firstname.lastname@example.org.
Kristine Harjes owns shares of Johnson and Johnson and Portola Pharmaceuticals. Todd Campbell owns shares of Pfizer and Portola Pharmaceuticals. The Motley Fool recommends Johnson and Johnson. The Motley Fool has a disclosure policy.