CHMP in Favor of BMY/PFE's Eliquis

Recently, Bristol-Myers Squibb Company ( BMY - Analyst Report ) and partner, Pfizer Inc. ( PFE - Analyst Report ) received some encouraging news with the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) recommending the approval of their anti-clotting drug Eliquis (apixaban).

The European Commission (EC) will take the final decision on Eliquis’ approval after reviewing the CHMP’s opinion. The EC’s decision will be binding on the 27 member states of the EU in addition to Iceland and Norway.

We note that Bristol-Myers and Pfizer intend to get the blood thinner approved in the EU for preventing strokes and systemic embolism in patients suffering from nonvalvular atrial fibrillation (NVAF) in addition to one or more risk factors for stroke. Atrial fibrillation refers to a cardiac rhythm disorder characterized by an erratic heartbeat.

The positive opinion of the CHMP was based on data from two phase III studies, ARISTOTLE and AVERROES. The studies evaluated approximately 24,000 patients suffering from NVAF.

We expect a hiccup-free approval for Eliquis for the NVAF indication in the EU unlike in the US. In June 2012, the US Food and Drug Administration (FDA) declined to approve Eliquis on the basis of the submitted data.

The US regulatory body issued a complete response letter (CRL) to the companies after reviewing the new drug application for Eliquis submitted last year. While issuing the CRL, the FDA asked for additional information on data management and verification from the ARISTOTLE study.

Even if Eliquis manages to gain approval, it would face intense competition in the anti-coagulant market on approval. Eliquis will have to compete with Bayer/Johnson & Johnson’s ( BAYRY - Analyst Report ) / ( JNJ - Analyst Report ) blood-thinner Xarelto. Moreover, the arrival of Boehringer Ingelheim’s Pradaxa has intensified competition in the market.

We remind investors that Eliquis was cleared in the EU last year for preventing venous thromboembolic events (VTE) in adults, who have undergone elective hip or knee replacement surgery. However, the atrial fibrillation market is more lucrative.

Neutral on Bristol-Myers/Pfizer

Currently, we have a long-term Neutral recommendation on Bristol-Myers. The stock carries a Zacks #3 Rank (Hold rating) in the short run. We have a similar stance on Pfizer.