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Expert Financial Analysis and Reporting

Issuance of Complete Response Letter for Eliquis Doesn’t Alter My Buy on Bristol-Myers Squibb

Investment Opinion

I believe that the issuance of a Complete Response Letter to Bristol-Myers Squibb (BMY) and Pfizer (PFE) for the use of Eliquis to prevent stokes caused by atrial fibrillation is a minor setback and believe that the issue can be resolved and the product approved by October at the earliest and April of 2013 at the latest. BMY is my number one pick among the Big Pharma companies based on what I consider to be the best pipeline in the industry with Eliquis being the most important of the pipeline products.

This is a mild positive for my second leading Big Pharma pick, which is Johnson & Johnson (JNJ); this is also a drug pipeline story although not as pronounced. This delay gives JNJ somewhat more time to strengthen its position in this market prior to Eliquis approval and entry. I regard Eliquis as being the more promising of the two products, but I think that Xarelto can be a strong number two. I continue to recommend both stocks

The Issue

The FDA just issued a Complete Response Letter for Bristol-Myers Squibb's and Pfizer's NDA for the use of Eliquis to prevent stokes in atrial fibrillation. The CRL requests additional information regarding data management and verification from the ARISTOTLE trial; it does not ask for a new clinical trial. The NDA for Eliquis involved over 24,000 patients, 400,000 patient visits and millions of collected data points.

I think that the recent issuance of a CRL for Johnson & Johnson’s Xarelto’s in its request to expand usage into acute coronary syndrome gives an insight into the FDA’s thinking in issuing the Eliquis CRL. The Xarelto decision was based on missing data in the ATLAS acute coronary syndrome trial. The FDA was concerned that there was a troubling lack of follow-up on patients, primarily those who withdrew consent in that trial.

ATLAS enrolled 15.523 patients with 1,294 (8%) of subjects withdrawing consent; this contributed significantly to the final status of more than 1,000 patients being unknown at the end of the trial. While the reported data from the trial was convincing, the FDA felt that the missing data made it difficult to have confidence in the results that JNJ submitted. There is the obvious concern that many patients withdrew consent because of issues that might have resulted in their being trial failures if they had continued in the study.

The key ARISTOTLE trial for Eliquis enrolled over 24,000 patients of whom only 380 patients (2.1%) had missing data due to this issue. Besides this much lesser percentage, the missing data was roughly equally divided between patients on Eilquis and those on warfarin. In the case of ATLAS, much of the missing data was in the Xarelto, not the warfarin arm. This suggests to me that this will not be a stumbling block for Eliquis as it was for Xarelto in the acute coronary syndrome indication.

BMY should be able to respond to the FDA’s request in a few months or possibly a few weeks and refile the NDA. If the FDA is requiring verification of existing data this could be a Class I response, which calls for a two month FDA review. If new analysis of existing data is required, it could be a class II review and take six months to review. In the case of a Class I response the NDA could be approved as early as October or November of 2012 and a Class II response would extend approval until March or April of 2013.

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