Recently, Bristol-Myers Squibb Company ( BMY - Analyst Report ) and partner Pfizer Inc. ( PFE - Analyst Report ) received some encouraging news with the European Commission (EC) clearing their anti-clotting drug Eliquis (apixaban) in the EU. The approval in the EU marks the first approval of the drug for the NVAF indication.

Eliquis was approved in the EU for preventing strokes and systemic embolism in adults suffering from nonvalvular atrial fibrillation (NVAF) along with one or more risk factors for stroke. Atrial fibrillation refers to a cardiac rhythm disorder characterized by an erratic heartbeat.

Approval was based on data from two phase III studies, ARISTOTLE and AVERROES. The studies evaluated approximately 24,000 patients suffering from NVAF.

The approval by the EC did not come as a surprise, as the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) had recommended the approval of the anti-clotting drug in September 2012.

Eliquis, on being launched, would face intense competition in the anti-coagulant market. The drug 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 note that the US approval process of Eliquis for the NVAF indication is on track. The US Food and Drug Administration (FDA) is expected to decide on whether to approve Eliquis for the indication by March 17, 2013. Positive news from the FDA would boost the sales potential of the drug.

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.