Portola: An Update On Possible Betrixaban Approval

| About: Portola Pharmaceuticals (PTLA)

Summary

Portola has had two bad news, but my take on both is that they are easily resolvable.

The bad news, however, has pulled the stock down, despite a recent upswing following betrixaban NDA.

Opportunity to buy even for latecomers.

Portola (NASDAQ:PTLA) has two product candidates. One, andexxanet alfa, is an antidote for popular factor Xa anticoagulants Xarelto and Eliquis. Two, betrixaban, is a factor Xa anticoagulant itself with a longer half life and other properties that makes it useful for post-hospital VTE prophylaxis up to 35 days beyond dosage, making it ideal for when anticoagulant antidote is critically needed. The story is beautiful; the ending, so far, is not. On Andexxanet, the FDA issued a CRL primarily related to manufacturing issues (which are easily resolvable, unlike an efficacy issue, which often requires new trials). The andexxa label may also not include savasya and lovenox with current data, which is really not a big deal. Also, Betrixaban failed to meet its primary endpoint (the number of thrombotic events) in a phase 3 trial testing it against Lovenox, the SoC. The stock went down by 50% over the months following these two news.

There's an excellent article on Forbes that discusses the betrixaban trial in detail. It appears that if the trial design was not so complicated, betrixaban may have actually succeeded. The trial design, to put it clearly, wanted to test betrixaban in the highest risk patients first, and then on to intermediate and low risk patients. Basically, it put the hurdles in a descending order; and failed the first hurdle by a small margin (p-value of .054). If it had done it the other way round, testing the drug in the broad population without classifying them by risk, it would have certainly succeeded. There certainly is clinical benefit, but the overpowered trial design failed to bring it out.

However, late last month, there was good news for betrixaban:

"…the FDA accepted Portola's New Drug Application (NDA) granting priority review for betrixaban, an oral, once-daily Factor Xa inhibitor anticoagulant, for extended-duration prophylaxis of venous thromboembolism (VTE) in acute medically ill patients with risk factors for VTE. A priority review shortens the FDA review timeline to six months from the standard review period of 10 months. The application for betrixaban, an FDA-designated Fast Track investigational drug, was deemed sufficiently complete to permit a substantive review and has been given a Prescription Drug User Fee Act (PDUFA) action date of June 24, 2017."

Its MAA in Europe was also accepted for review, and that decision should also come out in June-July.

The reason this NDA was accepted despite betrixaban's failure to meet the primary endpoint is given in a report published in the prestigious New England Journal of Medicine, which must be quoted extensively:

RESULTS

A total of 7513 patients underwent randomization. In cohort 1, the primary efficacy outcome occurred in 6.9% of patients receiving betrixaban and 8.5% receiving enoxaparin (relative risk in the betrixaban group, 0.81; 95% confidence interval [CI], 0.65 to 1.00; P=0.054). The rates were 5.6% and 7.1%, respectively (relative risk, 0.80; 95% CI, 0.66 to 0.98; P=0.03) in cohort 2 and 5.3% and 7.0% (relative risk, 0.76; 95% CI, 0.63 to 0.92; P=0.006) in the overall population. (The last two analyses were considered to be exploratory owing to the result in cohort 1.) In the overall population, major bleeding occurred in 0.7% of the betrixaban group and 0.6% of the enoxaparin group (relative risk, 1.19; 95% CI, 0.67 to 2.12; P=0.55).

CONCLUSIONS

Among acutely ill medical patients with an elevated d-dimer level, there was no significant difference between extended-duration betrixaban and a standard regimen of enoxaparin in the prespecified primary efficacy outcome. However, prespecified exploratory analyses provided evidence suggesting a benefit for betrixaban in the two larger cohorts.

The exploratory results in the two larger cohorts determined clinical benefit and guided the FDA decision. Thus, investors, while approaching this PDUFA as an investment catalyst, need to focus on the fact that the FDA is not going to be considering the failed primary endpoint in the high risk cohort. It already understands that failure. It will be looking at data from the other two cohorts, where betrixaban succeeded beautifully.

Bottomline is, this is like a set of two "fake" bad news. Both together have taken the stock down, both are resolvable. But in pulling the stock down, they have given latecomers another window of opportunity into buying PTLA. Although the December 23 news of the betrixaban NDA acceptance took the stock from $18 to $25, it is nowhere near the $40 levels it was earlier last year, or the $50 levels we had seen before the so-called biotech collapse.

Given that I think both andexxa and betrixaban will break through the FDA hurdle in 2017, and that they are both targeting the huge $8bn anticoagulant market, I will be buying this stock at every opportunity.

Disclosure: I/we 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.

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