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Expert Financial Analysis and Reporting

Portola: Reiterating Buy and Refuting Recent Negative Blog by Adam F-stein (PTLA, Buy, $54.12)


Adam F-stein wrote an article on Portola on September 19, 2017 with the headline “Commercial launch of Portola’s new blood thinner could be threatened by new clinical guidelines”. This caused a 9% drop from the closing price of $56.57 of the prior day to $52.02 at the close on September 19. The analysis in this article refutes the F-stein blog and reiterates my buy recommendation. In the investment thesis section, I go over a number of scenarios involving the potential launches of Bevyxxa and AndexXa and my guesses for price behavior in each.

The F-stein blog is based on draft guidelines released on July 25 by the American Society of Hematology (ASH) on the role of DOACs in the prevention of venous thrombosis in acute medically ill patients. DOAC is an acronym for direct acting anti-coagulants. The two key DOACs currently on the market are Johnson & Johnson’s Xarelto and Bristol-Myers Squibb/ Pfizer’s Eliquis, which are Factor Xa inhibitors. Portola’s Bevyxxa, which has the same mechanism of action, was approved on June 23. It is importantly differentiated from Xarelto and Eliquis in that it is the first and only anticoagulant approved for hospital and extended duration prophylaxis (35 to 42 days) of venous thromboembolism (VTE) in adult patients hospitalized for an acute medical illness who are at risk for thromboembolic complications due to moderate or severe restricted mobility and other risk factors for VTE.

F-stein has moved on from to do his blogging on STAT+. I tried to log on to the STAT+ website to read his article but this would have required a subscription which I was not about to do. Frankly, they would have to pay me to read F-stein’s blogs so I did not read his blog and I am responding only to the headline. Perhaps in his article there is some profound insight that might alter the analysis in this report, but based on my past experience with his work, I highly doubt it. Let me start by giving some background on the ASH draft guideline.

July 25 Draft Guideline from the American Society of Hematology (ASH)

The F-stein blog is based on draft guidelines that were published by ASH on July 25, 2017. Note that this is a draft in which the guideline panel that is charged with making final recommendations is asking for public comment on possible new guidelines for the prevention of venous thrombosis in hospitalized patients with acute medical illness. This is made clear in reading the introduction to the draft.

“American Society of Hematology (ASH) guidelines are based on a systematic review of available evidence. Through a structured process, a guideline panel makes judgements about the evidence and forms recommendations. The public comment period occurs after recommendations are formed but before a manuscript report of the guidelines has been finalized and before ASH organizational approval of the guidelines. Comments collected during the open comment period are provided to the guideline panel for review prior to finalizing the guidelines.

These draft recommendations are not final and therefore are not intended for use or citation. To submit comments on the draft recommendations, please visit Only comments submitted via the online survey will be reviewed by the guideline panel. The public comment period for these draft recommendations is July 25 to August 24, 2017.”

There are two questions posed in the guidelines that F-stein (or whoever he may be relying on for the conclusions reached in his blog) believes raise concern about the use of DOACs in acute medically ill patients. Remember that Bevyxxa is the only DOAC that has been approved by the FDA in this indication. Also, this is only indication for which Bevyxxa has been approved by the FDA. Questions 4 and 5 of the draft guidelines give the panel’s proposed recommendations on the use of DOACs in acute medically ill patients.

Question 4: Should any DOAC vs. prophylactic LMWH be used in acutely ill medical patients?

The ASH guideline panel recommends using prophylactic LMWH over DOACs in acutely ill medical inpatients (strong recommendation, moderate certainty of the evidence).

Question 5: Should extended DOAC vs. shorter duration non-DOAC inpatient prophylaxis be used in acutely ill medical patients?

The ASH guideline panel recommends not using extended DOACs (rather than shorter) inpatient prophylaxis with a non-DOAC agent in acutely ill medical patients (strong recommendation, moderate certainty of the evidence about effects).

My Thoughts

Questions 4 and 5 if implemented as written obviously would deter physicians from using Bevyexxa but my analysis leads me to strongly believe that not only will these not be adopted by ASH, but that Bevyxxa will be recommended as standard of care. This is the complete opposite of what F-stein is stating. Let’s start with a simple understanding of how guidelines are established by professional organizations like ASH. The practice of medicine is evidence based which means that guidelines are constructed on data created in well conducted clinical trials. Of even more importance is how the FDA reviews such data and grants approval of a drug.

Here is my interpretation of this draft which at first glance appears very negative on DOACs. It seems highly probable that this draft had to be in preparation for a considerable amount of time and was likely written before the June 23 approval of Bevyxxa. It is highly likely that it is based on looking at the clinical data from the two marketed DOACs which failed in clinical trials in this indication: the Xarelto MAGELLAN trial and the Eliquis ADOPT trial. In MAGELLAN, efficacy of Xarelto was established but side effects caused the FDA to reject approval on a risk to reward basis. In the Eliquis ADOPT trial just the opposite occurred, as safety was acceptable but efficacy was not so that the FDA did not approve the drug.

Portola subsequently conducted the APEX trial which compared Bevyxxa to enoxaparin (the leading drug of the LMWH class). The results of this trial require some in-depth analysis and discussion. In the appendix of this report, I go through the issues with the APEX trial in great depth for those of you who want detailed background information. However, the critical takeaway is that the FDA reviewed the APEX trial and concluded that Bevyxxa was superior to enoxaparin which is the most widely used low molecular weight heparin (LMWH). The agency approved the drug on June 23, 2017.

In regard to question 4 in the draft guidelines, the FDA’s answer is that Bevyxxa is superior to LMWH. In regard to question 5, the agency’s answer is that Bevyxxa should be used instead of non DOACs or LMWHs. If I am correct and I believe the probability is extremely high, this draft does not take into account the FDA’s endorsement of Portola’s phase 3 clinical trial. The most pertinent clinical data on acute medical illness is Portola’s APEX trial which led to the approval of Bevyxxa by the FDA. This should be the new guideline for treatment.

If we are to believe F-stein the ASH panel will reject the results of the APEX trial and recommend guidelines that are completely opposite to the FDA’s conclusion that Bevyxxa is superior to LMWH in extended treatment for prevention of venous thrombosis in acute medically ill patients.

Investment Opinion

I give the odds of F-stein’s view being correct the same probability as me winning the 440 meter high hurdles at the next summer Olympics. In other words, I believe this is not an investment concern.

Portola’s stock has bounced around since the FDA approval of Bevyxxa on June 23, caused it to jump 47% on that day. The stock moved steadily higher to reach $66.04, but then during the second quarter conference call on August 9, management said that a manufacturing issue might delay the launch of Bevyxxa from the expected September to November time frame to 1Q, 2018. While they thought the chances small, they could not rule out a longer delay. At that time, they also said that they would do an equity offering before year end. This offering was completed on September 12 as the Company raised over $300 million at a price of $55.00. The stock began to edge higher with the equity offering behind them and then F-stein struck with his blog on September 18, 2017 dropping the stock from $56.57 to $52.04. The stock has now recovered to $54.12. This is all shown in the next table.


Recent Stock Price Behavior
Closing price
June 22, 2017 $38.25
June 23,2017 $56.06 FDA approves Bevyxxa
July 21, 2017 $66.04
August 9, 2017 $60.39 During 2Q conference call management states that it will do an equity offering in 2H, 2017 and that a manufacturing issue may delay launch of Bevyexxa
August 17, 2017 $53.22
September 12, 2017 $56.96 Announces completion of $300 million equity offering at $55.00 per share
September 18, 2017 $56.57
September 19, 2017 $52.04 F-stein blog
September 22, 2017 $54.12


I discount the F-stein article as being an issue and the equity offering is behind us and has put the Company in a strong financial position to execute the launch of Bevyxxa and potentially AndexXa. The big near term issue is how the FDA will respond to the manufacturing issue; is expected in November. See my report of September 6, 2017 for more detail. If the FDA response indicates that Bevyexxa can be launched in 1Q, 2018 or sooner I would expect a major bounce in the stock. Projecting how much that might be is guesswork, but my guess is that the stock could rise into the mid-60s. If the FDA response leads investors to expect a later launch, say in 2H, 2018, I think the stock could drop to perhaps $45. In either case, it is important to understand that there is no question on the clinical data for Bevyxxa so that the launch is a matter of when rather than if.

The next major event will be the PDUFA data for AndexXa of February 2, 2017. As I noted earlier, this drug has been designated a breakthrough drug and its approval, which I expect, should cause a significant bounce in the stock. I previously laid out two scenarios for Bevyxxa which led to an early 2018 price of perhaps $45 if the launch is delayed until 2H, 2018. In this case, I think that the approval of AndexXa could cause the stock to increase perhaps $65 or more. In the case that the FDA action indicates a launch of Bevyxxa in early 2018, I guessed that the stock might trade at $65 or more in early 2018 and then the approval of AndexXa could drive the stock to $80 or higher.

In either of these scenarios, the stock price later in 2018 will be driven by the strength of the launches. In the case of almost all drug launches, managed care sets up initial hurdles to reimbursement that results in slow takeoffs. I think that AndexXa is a life saving drug addressing an unmet medical need and should have a strong launch, but we shall see. Bevyxxa also meets an important unmet medical need and is life saving, but not as dramatically as AndexXa. It is really hard for me to project what happens in the launch phases of 2018. In any event, I believe the stock has enormous upside over the longer term. My sales estimate for Bevyxxa in 2020 is $1.3 billion and it is $910 million for AndexXa.  Based on this, I have a 2021 price target of $426. See my initiation report of May 4, 2017 for more details on these projections and my price target thinking. Portola Pharmaceuticals: Initiating Coverage with a Buy (PTLA, $40.05). I am reiterating my buy on Portola in all of these scenarios. However, there is one other possibility in 2018 and that would be an acquisition of Portola by a large biopharm company. These two drugs would be a major boost to the product portfolio of the large multinational firms, whose pipelines in most cases are lackluster. Such a takeover, if it were to occur, could be at well over $100.


Appendix: More Detail on Bevyxxa in the Prevention of Venous Thrombosis in Acute Medically Ill Patients


Fulfills Unmet Medical Need

Bevyxxa (betrixaban) is an oral factor Xa inhibitor like Xarelto, Eliquis and Savaysa. Very importantly, it is targeting an important segment of the anticoagulant market for which Pradaxa, Xarelto, Eliquis and Savaysa haven’t been approved. Portola has positioned betrixaban to be the first anticoagulant drug approved for extended duration, venous thromboembolism (VTE) prophylaxis in acute medically ill patients. These are patients who are hospitalized for non-surgical conditions, such as heart failure, stroke, infection, rheumatic disorders and pulmonary disorders. Because of restricted mobility and other risk factors, they have an increased risk for VTE, both in the hospital and after discharge.

Current Treatment of Acute Medically Ill Patients

In the acute medically ill setting in the hospital, heparin and LMWH are the drugs that are currently used. They have shown in clinical trials that they can reduce the rate of venous and pulmonary thromboembolism by more than 50% without major bleeding in high risk patients who are characterized by

  • Several days of restricted mobility,
  • age,
  • an elevated blood marker known as D-dimer,
  • previous VTE event,
  • family history of VTE,
  • smoking,
  • hormonal therapy and others.

These patients are typically treated for 6 to 14 days, most of which is in the hospital. Almost all hospitalized non-surgical patients have at least one of these risk factors, and approximately two-thirds have two or more.

The important therapeutic niche for betrixaban is to continue treatment for an extended period after the patient is discharged from the hospital. Heparin is infused so that it can only be used in the hospital and subcutaneous, twice a day administration of LMWH is a substantial barrier to use after discharge. They just aren’t practical in the out-patient setting. There are no other drugs approved in this setting and this represents a significant unmet medical need.

There is a material risk of VTE after discharge and no oral drugs have been approved for this indication. Johnson & Johnson conducted a large trial in acute medically ill patients that was unsuccessful, but provided important data. The MAGELLAN study of 8,101 patients showed that the rate of VTE-related death for the 10-day period while the patients were in the hospital receiving anticoagulation therapy was 0.2%. Importantly In the 25 day period after discharge, the VTE related death rate for patients who did not receive anticoagulation treatment, was four times higher at 0.8%.This highlights the need for extended duration of anticoagulation after discharge.

Why Aren’t Xarelto and Eliquis Used in this Setting?

There have been three previous large trials involving three different drugs. The drugs and trials were as follows:

  • Lovenox- the Extended Clinical Prophylaxis in Acutely Ill Medical Patients (EXCLAIM) trial of 4,726 patients
  • Eliquis- the Apixaban Dosing to Optimize Protection from Thrombosis (ADOPT) trial of 6,524 patients and
  • Xarelto-the Multicenter, Randomized, Parallel Group Efficacy and Safety Study for the Prevention of Venous Thromboembolism in Hospitalized Acutely Ill Medical Patients Comparing Rivaroxaban with Enoxaparin (MAGELLAN) trial of 8,211 patients

The MAGELLAN and EXCLAIM trials both met the primary efficacy endpoint of decreased VTE in acute medically ill patients. However, the bleeding risk was not acceptable so approval was denied based on a benefit to risk ratio. The ADOPT trial of Eliquis did not demonstrate significant clinical efficacy, but the incidence of major bleeding was lower than was seen in MAGELLAN.

How Might Betrixaban Succeed Where Eliquis and Xarelto have Failed?

Betrixaban, Xarelto and Eliquis all have the same mechanism of action, they inhibit factor Xa. The obvious question is why betrixaban might succeed where Eliquis and Xarelto have failed.  Phase 3 clinical trials like MAGELLAN and ADOPT can fail because of drug properties or the dosing of the drug (not all factor Xa inhibitors are the same). There are intrinsic properties of betrixaban that may make it more effective than Xarelto and Eliquis in this setting. Importantly drug trials can also fail because of patient selection for the trial and trial design. Even though all three drugs work through factor Xa inhibition, these issues resulted in betrixaban succeeding where the other two drugs failed.

Design of the Phase 3 APEX Trial of Betrixaban in Acute Medically Ill Patients

Portola used its detailed knowledge of betrixaban’ s drug properties and phase 2 clinical experience and  took into consideration learnings from the MAGELLAN and ADOPT trials to design the phase 3 APEX trial. It was designed to demonstrate the safety and efficacy of betrixaban for extended duration, VTE prophylaxis starting with a hospital stay and continuing for a 35 day period following discharge. The patients were acute medically ill patients with prospectively defined risk factors.  It was a randomized trial comparing:

  • a once-daily dose of 80 mg of betrixaban for 35 days (starting in the hospital and continuing after discharge)
  • to in-hospital administration of 40 mg of enoxaparin once daily for 6 to 14 days followed by placebo for the remainder of the study period.

Between 35 and 42 days, ultrasound imaging was used to detect new clots. The primary endpoint was to show superiority of betrixaban versus enoxaparin as determined by the reduction of VTE related events at 35 days plus. This design is shown in the following schematic.



From March 2012 through November 2015, 8,589 patients were screened at 460 sites in 35 countries. Of these patients, 7,513 were found to be eligible to participate in the study and underwent randomization (3,759 in the betrixaban group and 3,754 in the enoxaparin group). Protocol changes were made in June 2014 to target (enrich) patients at high risk for VTE. This required the presence of an elevated d-dimer level or an age of at least 75 years as an entry criterion. The statistical plan was modified to create two cohorts.

  • Cohort 1 included 3,870 patients who had an elevated baseline d-dimer level (two times or more the upper limit of the normal range),
  • Cohort 2 included the patients in cohort 1 plus those who were 75 years of age or older for a total of 5,735 patients
  • Cohort 3 was all patients enrolled in the trial including those enrolled before June 2014 for an overall total of 6,286 patients.

The primary efficacy outcome was a composite of:

  • Either asymptomatic or symptomatic deep-vein thrombosis between day 32 and day 47,
  • Symptomatic nonfatal pulmonary embolism, or death from venous thromboembolism between day 1 and day 42.

The principal safety outcome was the occurrence of major bleeding at any point until 7 days after the discontinuation of all study medications.

The APEX Trial Appeared to Fail, But………

The three cohorts that were included in the efficacy analysis were pre-specified in a procedure with a fixed hierarchical sequence to adjust for the type I error rate. If betrixaban was superior to enoxaparin on the primary endpoint in cohort 1, the primary efficacy endpoint would then be tested in cohort 2 and if superiority was shown then the primary efficacy endpoint would be tested in the overall study population which was cohort 3. The statistical design specified that if superiority was not met in cohort 1 then analyses of data in the other two cohorts would be only exploratory. This statistical design produced a problem.

The decision to perform hierarchical testing of trial outcomes in subgroups of the overall trial population was based on the expectation that patients with an elevated d-dimer level or an age of at least 75 years would represent a subgroup enriched for both a greater risk of venous thromboembolism and it was expected that they would have a greater benefit from extended-duration antithrombotic therapy. These expectations were based on data for similar patients who were enrolled in the MAGELLAN trial of rivaroxaban.

The primary efficacy outcomes for each cohort were as follows:

  • In cohort 1, the primary efficacy outcome occurred in 6.9% of the betrixaban group and 8.5% of the enoxaparin group. The relative risk in the betrixaban group was 0.81 (95% confidence interval [CI], 0.65 to 1.00; P=0.054). This first test in the sequence of cohorts did not meet the pre-specified threshold for statistical significance; therefore, all subsequent pre-specified efficacy outcomes were considered to be exploratory and were not used to draw conclusions regarding statistical significance.
  • In cohort 2, the primary efficacy outcome occurred in 5.6% of the betrixaban group and 7.1% of the enoxaparin group (relative risk, 0.80; 95% CI, 0.66 to 0.98; P=0.03).
  • In cohort 3 (the overall population), the primary efficacy outcome occurred in 5.3% and 7.0% of the patients, respectively (relative risk, 0.76; 95% CI, 0.63 to 0.92; P=0.006).

Safety results relating to bleeding were very positive. In the overall safety population, major bleeding occurred in 0.7% of the betrixaban group and 0.6% of the enoxaparin group (relative risk, 1.19; 95% CI, 0.67 to 2.12; P=0.55). There were two cases of intracranial bleeding in the betrixaban group and seven in the enoxaparin group. There was one case of fatal bleeding in each group. Unlike enoxaparin in the EXCLAIM trial, apixaban in the ADOPT trial, and rivaroxaban in the MAGELLAN trial, the use of extended-duration betrixaban in APEX was not associated with significantly more major bleeding than standard-duration enoxaparin.

Portola Soldiered On; Upon More Detailed Analysis the Trial Could Be Judged a Success

Based on the trial design, the APEX trial failed as the p value in cohort 1 was 0.054. However, there was a dispute as to whether one patient in the control group had experienced an event. The CRO conducting the trial did not judge that an event had occurred, but this was disputed by Portola and some KOLS. If the patient had been judged to have had an event, the trial would have been successful the primary endpoint would have been reached with p=0.048.

The results in cohort 1 are perplexing as it was expected that sicker patients would benefit more. Cohort 2 included the 3,870 patients from cohort 1 and another 1,875 patients who because of age were thought to be at higher risk. It was unexpected that this group achieved statistical significance on the primary endpoint of p=0.03 when cohort 1 did not. Cohort 3 included cohort 2 and 551other less sick patients and in this large patient group the p value was a very impressive 0.006. Surprisingly, patients who prospectively were thought to be less sick patients appeared to do better. In addition to the narrow miss in cohort 1, the secondary endpoints generally supported superior efficacy over enoxaparin. Very importantly, the safety data showed no risk of major bleeding versus enoxaparin and even hinted at slightly less major bleed issues with betrixaban.






















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