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This week in Pharma (Nov 6, 2011)

November 06, 2011 | About:
Chandan Dubey

Chandan Dubey

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JNJ wins approval for Xarelto (Nov 4, 2011)



The drug Xarelto, known chemically as rivaroxaban was approved by FDA for preventing stroke among patients suffering from atrial fibrillation. This condition causes upper heart chambers to beat chaotically and ineffectively causing blood clots that travel to the brain, blocking blood flow and sometimes causing strokes.

Xarelto was approved in July to prevent strokes in patients with hip and knee replacement and this new approval expands the market of drug to a much larger group of 2.2m americans suffering from atrial fibrillation. Bayer estimates peak sales of nearly $3bn.

There are some catches with the approval. J&J wanted to claim that Xarelto is superior to warfarin, another drug which is used to treat the same indication for more than half a century. Doctors have trouble estimating the right dose of warfarin for each patient as too much causes serious internal bleeding and too less can still result in stroke. FDA not only rejected the claim but also added a more serious black box warning that the drug should not be discontinued without consulting a physician.

According to IMS health, last year US pharmacies filled 32m prescriptions for warfarin. Numerous drugmakers have been working to develop an alternatives for replacing the problematic warfarin. Boehringer Ingelheim already won approval for Pardexa giving it a first-to-market advantage. Pardexa has been linked with 50 deaths across the world since its market launch (it was approved in October 2010 in the US). Rival drugs include Eliquis from BMY and Pfizer and Lixiana by Daiichi Sankyo.

Xarelto was developed by German drugmaker Bayer and co-developed by J&J. J&J holds the US marketing rights while Bayer will market the drug in the rest of the world.

GSK reaches settlement with US government (Nov 3, 2011)



GSK has agreed to settle with the US government to resolve multiple investigations relating to its marketing and sales practices. The company will pay $3bn and the amount is covered by existing provisions. GSK disclosed in January 2011 that it took a $3.4bn hit in 2010 over liability claims for patients who had been taking Avandia. The company’s legal provisions stand at 2.9bn pounds ($4.6b, as reported by reuters).

GSK CEO Andew Witty has been focused on changing the company after he joined in 2008. Witty had tried to improve the transparency of the company and is also trying to remove the financial motives from pharma sales by evaluating customer feedback and representatives ability to explain a drug to the patient.

GSK also announced on Nov 4, 2011 that it has bought $1.3m worth of shares between 1.399p and 1.375p, which it intends to hold in its treasury.

GlaxoSmithKline Invests $1.3M In Theravance (Nov 3, 2011)



GSK now owns 15.7m shares, which is 19.01% of the company. Thervance is a biopharma company focussing on small molecule medicines across a number of therapeutic areas including respiratory disease, bacterial infections and gastrointestinal motility dysfunction.

AstraZeneca buys back 691,301 stocks to cancel (Nov 2, 2011)



AZN announced that it bought 691,301 stocks on Nov 1, 2011 at a price of 2944p a stub for cancellation. It has a total of 1,318,682,993 shares outstanding now, after the cancellation of now purchased stock.

About the author:

Chandan Dubey
I invest because I want to be free by the time I reach 40 years of age i.e., 2025. My investment style is to find a small number of bets with large margins of safety. I pay a lot of attention to management and their incentive. Ideally, I like to buy owner operator businesses. I am fortunate to have a strong inclination towards studying. I aid my financial understanding by extensive reading in psychology, economic, social sciences etc.

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