Pfizer And Bristol's Search For Antidote To Blood Thinners And Lawsuits

| About: Pfizer Inc. (PFE)

In November 2012 European regulators have approved Eliquis (generic name: apixaban), a possible blockbuster blood thinner and one of the top late-stage prospects in the pipeline for Bristol-Myers Squibb (NYSE:BMY) and its partner Pfizer (NYSE:PFE).

Eliquis is now approved in the 27 countries of the European Union as well as Iceland and Norway for prevention of stroke and systemic embolism in adult patients with nonvalvular atrial fibrillation with one or more risk factors. Eliquis is the only oral anticoagulant that has demonstrated superior risk reduction versus warfarin in the three important outcomes: stroke and systemic embolism, major bleeding, and all-cause mortality.

In the U.S. the FDA postponed approval twice, and currently a decision is set to March 17, 2013.

One critical issue may be holding back U.S. approval: Eliquis, like the new generation of blood thinners in general, lacks an approved antidote that could be used in bleeding emergencies.

Portola's antidote

A small South San Francisco biotechnology company may have the answer. Portola Pharmaceuticals in November signed an agreement with Bristol-Myers Squibb and Pfizer to test an agent that reverses the effects of Eliquis in the event of bleeding from injury, surgery or some other cause.

Portola's compound, PRT4445 is a universal Factor Xa inhibitor antidote in clinical development, designed to reverse the anticoagulant activity of any Factor Xa inhibitor.

Portola has presented nonclinical data on PRT4445 at multiple major scientific conferences and has shown reductions in bleeding in animal models with enoxaparin (low molecular weight heparin), Arixtra, (chemically related to low molecular heparin and made by GlaxoSmithKline (NYSE:GSK) and Xarelto made by Johnson & Johnson (NYSE:JNJ) and Bayer (OTCPK:BAYRY).

Bristol-Myers Squibb and Pfizer will make an undisclosed cash payment to Portola upon initiation of the proof-of-concept study with Eliquis and will provide development and regulatory guidance. The trial is scheduled to start before the end of 2012.

Portola is keeping all development and commercial rights to PRT4445 in the deal.

The antidote won't work on Pradaxa, Boehringer Ingelheim's drug, because that drug uses a different mechanism of action.

William Lis, CEO of Portola, said that the company plans to position the antidote, if approved, as its own franchise rather than a companion drug delivered in bundles with others, and it would be sold by the same commercialization team that sells betrixaban, Portola's own anticoagulant in development.

Atrial fibrillation

Atrial fibrillation is irregular heartbeat with a huge global market as shown by Plavix's reign as a blockbuster for many years.

There are some 6 million people in Europe and another 6 million in the U.S. suffering from atrial fibrillation. The chance of developing this condition raises to 25% above the age of 40.

Patients with atrial fibrillation have a five times greater risk of stroke and therefore there is a critical need for treatment options.

A new generation of blood thinners on the market, the so called Factor Xa inhibitors have shown substantial advantages over current standard therapies, such as warfarin and enoxaparin.

However, physicians need a rapid reversal agent for patients taking these drugs who start bleeding or require urgent surgery.

Although bleeding events occur infrequently (1-4 percent in clinical studies), this number globally is really large due to the large number of patients taking the drugs.

Right now the cost to treat a bleeding case can range from $15,000 to $42,000 in direct medical expenses, due in part to non-specific, incomplete and difficult-to-administer reversal strategies that can result in a pro-thrombotic state (an increased chance of blood clots forming).

The 1% to 4% of patients ratio does not include patients who need emergency surgery while on an anticoagulant.

Portola estimates that by 2020, annually as many as 300,000 hospital visits will be the result of major bleeding events and 3 million U.S patients will be at risk for bleeding because they require surgery.

Currently, no agents are approved to specifically reverse the activity of oral Factor Xa inhibitors.

The lack of an antidote is the only known major liability of Factor Xa inhibitors.

Recent reports of excessive and serious bleeding events associated with new users of Boehringer Ingelheim's direct thrombin inhibitor Pradaxa have put a spotlight on the need for antidotes.

The current standard warfarin (sold under the brand name Coumadin), was originally developed as a rat poison. Coumadin is now one of the most frequently prescribed medications in the United States, with nearly 18 million prescriptions dispensed annually.

Despite its popularity, the drug is not for everyone, because it has numerous drug and food interactions and requires frequent blood tests to monitor its levels.

Doctors say that once you get to a steady state on Coumadin, you only have to check once a month, but the trouble is that patients don't always go to the lab every month.

It also has advantages in that it's effective and cheap, and has an antidote: vitamin K, which allows the blood to clot if administered promptly by injection or orally.

Investor's summary

Portola is a privately held company and there is no news about plans of going public soon.

Portola runs an expensive operation burning a great deal of money in clinical trials but it is well supported by the venture capital community. Venture investors include Temasek, an Asian investment company, Eastern Capital Limited and original supporters like AllianceBernstein, Alta Partners, Apothecary Capital, Brookside Capital, China Investment and Development, DE Shaw, Frazier Healthcare, Goldman Sachs, IBT Management, Janus Capital and many others.

2012 was a big year for Portola. Just eight months after Merck (NYSE:MRK) dumped its collaboration with Portola on the anti-clotting drug betrixaban, the company has rounded up $89 million in new financing to push the program through a late-stage trial by itself.

And just recently Biogen Idec (NASDAQ:BIIB) agreed to partner up on a $553 million autoimmune drug pact, with $45 million in upfront and equity money.

Bristol and Pfizer

It's hard to overestimate the critical importance of Eliquis for Bristol and Pfizer.

Analysts expect that it can earn anywhere from $3 billion to more than $5 billion a year, provided it gets approved in the U.S. The regulatory delays have benefited some major league competition in the field that were approved earlier, such as Pradaxa and Xarelto, but analysts believe there is still a potential to make it big and dominate this critical segment.

Bristol's sales were $3.7 billion in the third quarter, down 30% compared to last year due to the exclusivity loss of Plavix and Avapro, causing volume to be down 28%.

Pfizer's third-quarter 2012 revenues of $14 billion decreased 16% year-over-year driven mainly by the loss of exclusivity of several key products in certain geographies, notably Lipitor in all major markets.

Pfizer is lowering its revenue guidance for the full year to $58 billion from $60 billion and expects to spend more than 12 billion on dividend payments and share repurchases during 2012.

The existence of the antidote would give doctors and patients a peace of mind, satisfy the FDA and keep lawsuits away, at least in one aspect.

The finding of an effective antidote to bleeding and the following large sales from the new product could prove enormously significant to both companies.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.