A closely watched blood clot preventer from Bristol-Myers Squibb Co and Pfizer Inc failed to win approval from U.S. health regulators, the companies said on Monday, sending their shares lower.
Shares of Bristol fell nearly 4 percent after the news about the drug, Eliquis, which is expected by Wall Street to eventually gain approval and dominate a potential $10 billion market to replace generic blood thinner warfarin. Pfizer shares dropped 1.5 percent.
In its decision, the U.S. Food and Drug Administration did not require the two companies to do new clinical trials. The agency's complete response letter did request more information on data management and verification from a key trial supporting the medicine.
"FDA and the companies are committed to working expeditiously to address the outstanding questions and move the application forward," Bristol and Pfizer said in a statement.
Wall Street analysts were surprised by the decision but said the FDA's relatively modest requests for additional information suggested the drug could obtain approval within six to 12 months.
ISI Group analyst Mark Schoenebaum said Bristol and Pfizer likely want to claim Eliquis is both safer and more effective than warfarin, "something that no other blood thinner has." He speculated the FDA is being "extra cautious" in evaluating this claim.
Schoenebaum expects the companies will respond to the agency by the end of the year, with the drug winning approval by the middle of 2013.
SURPRISE OVER DELAY
Eliquis is designed to prevent strokes and clots in patients with a dangerously irregular heartbeat called atrial fibrillation. The drug, also known as apixaban, is the third new blood clot treatment to seek FDA approval for replacing warfarin, which has been used since the 1950s and requires careful monitoring due to the risk of serious bleeding.
The FDA granted an expedited review to Eliquis last November, based on its clinical data. But in March, the companies said the agency had postponed acting on the application for three months, resulting in a June 27 deadline.
If approved for stroke prevention, Eliquis would compete against two recently approved blood clot preventers: Xarelto, from Johnson & Johnson and Bayer, and Pradaxa from Boehringer Ingelheim.
Some top cardiologists say they are not ready to prescribe either Xarelto or Pradaxa due to concerns that the drugs pose their own risks to patients if not properly taken or monitored.
Last week, Xarelto failed to gain FDA approval for people with acute coronary syndrome, which could have given it a wider market of patients.
"All of this (delay) is surprising given the widespread perception that Eliquis is a best-in-class product relative to already-approved novel oral anticoagulants Pradaxa and Xarelto," Sanford Bernstein analyst Tim Anderson said in a research note.
J.P. Morgan analyst Chris Schott expects Eliquis to eventually capture half of the atrial fibrillation market, even with its delay, while Deutsche Bank analysts see peak global sales of $2.65 billion in 2016.
Bristol shares dropped 3.6 percent to $34.08 in morning trading on the New York Stock Exchange, while Pfizer shares fell 1.5 percent to $22.39.
(Reporting By Lewis Krauskopf in New York, additional reporting by Anna Yukhananov in Washington; editing by Michele Gershberg, Maureen Bavdek and John Wallace)