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The HealthCare unit of Bayer (BAYRY - Analyst Report) recently filed an application with the European Medicines Agency (EMA) seeking marketing approval for its blood thinner, Xarelto, for an additional indication in the EU. Bayer is looking to get the drug approved for treating pulmonary embolism (PE) and preventing the recurrence of deep vein thrombosis (DVT) and PE in adults. 

The HealthCare unit of Bayer has co-developed Xarelto with the Janssen Research and Development unit of Johnson & Johnson (JNJ - Analyst Report). While Johnson & Johnson is exclusively responsible for the marketing of Xarelto in the US, Bayer is responsible for the same in ex-US markets.

Bayer is seeking European approval for the indication on the basis of encouraging data from a phase III study (EINSTEIN-PE: n=4,833). Data from the study proved Xarelto to be as efficient as the current standard of care (Sanofi’s (SNY - Analyst Report) Lovenox) in reducing recurrent symptomatic VTE. Results further revealed that while the overall bleeding rates were similar in patients in both the cohorts, patients treated with Xarelto experienced lower rates of major bleeding compared to those treated with Lovenox.

We note that Bayer/Johnson & Johnson are also looking to get Xarelto approved in the US for reducing the risk of cardiovascular events in patients suffering from acute coronary syndrome (ACS). ACS refers to a heart disease, which results in the blockage of a coronary artery via a blood clot. Xarelto is under priority review for the indication. Successful label expansion of Xarelto, already approved for multiple indications including the lucrative stroke prevention in non-valvular atrial fibrillation indication, would further boost the top lines of the companies.

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.

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