The HealthCare unit of Bayer (BAYRY - Analyst Report) has updated the labels in the US for the oral contraceptives in its portfolio which contain drospirenone following a directive from the US Food and Drug Administration (FDA).
As a result, information from recent studies, which evaluated the risk of venous thromboembolism (VTE or blood clots) in women taking birth control pills containing drospirenone, is available on the drug labels. The oral contraceptives containing drospirenone in Bayer’s product portfolio include drugs such as Yaz, Yasmin, Beyaz and Safyral.
The revised information on the labels make clear that women taking birth control pills containing drospirenone stand a greater risk of being affected by VTE compared to those taking oral contraceptives containing progestins such as levonorgestrel.
The FDA further stated that women should consult doctors regarding the risk of being affected by VTE before choosing the method for birth control. Moreover, doctors should weigh the pros and cons of a woman being affected by VTE before prescribing birth control pills containing drospirenone.
More than the label updation, we believe that going forward investor focus will be on the market performance of blood thinner Xarelto, which was approved for multiple indications last year. The HealthCare unit of Bayer has co-developed Xarelto with the Janssen Research and Development unit of Johnson & Johnson (JNJ - Analyst Report).
In November 2011, Xarelto was approved in the US for the lucrative stroke prevention in non-valvular atrial fibrillation (SPAF) indication. It was approved for the same indication in the EU in December 2011. Apart from SPAF, Xarelto is also approved for the treatment of deep vein thrombosis (DVT) in the EU (December 2011). DVT refers to the obstruction of a blood vessel, courtesy a blood clot. Furthermore, in July 2011, the FDA cleared Xarelto for the prevention of DVT, which may cause pulmonary embolism in patients undergoing knee or hip replacement surgery. Bayer/ Johnson & Johnson are looking to expand Xarelto’s label further.
Neutral on Bayer, Johnson & Johnson
Currently, we have Neutral recommendations for both Bayer and Johnson & Johnson in the long run. However, the short-term ratings differ. While Bayer carries a Zacks #2 Rank (“Buy” rating) Johnson & Johnson carries a Zacks #3 Rank (“Hold” rating) in the short run.