AstraZeneca bets on a blood drug with multibillion-dollar potential

AstraZeneca (AZN) has had a good week with its anticlotting drug Brilinta (ticagrelor). It impressed many observers by announcing positive results of a late-stage head-to-head study and a mid-stage study for Brilinta, and on Thursday, it said it had filed for Food and Drug Administration approval. Brilinta could be on the way to becoming a megablockbuster drug.

Study results for the experimental drug -- which fights acute coronary syndrome -- were first presented Sunday. For the study's 8,430 sickest patients, those taking the drug suffered fewer serious cardiovascular events (or deaths) than those taking Plavix, from Bristol-Myers Squibb (BMY) and Sanofi-Aventis (SNY).
Positive Studies

The Brilinta group had an 18% relative reduction in death from any cause at one year; rival drugs that also prevent cardiovascular events have not significantly reduced mortality. And Brilinta patients were as likely to suffer from serious bleeding as Plavix patients, meaning the drug didn't compromise safety.

On Wednesday, AstraZeneca released data from a mid-stage study showing that Brilinta also works faster than Plavix, and potentially crucial to patients needing procedures to clear arteries. Brilinta also showed greater inhibition of platelet aggregation ("clumping") than Plavix within the first 24 hours after the initial dose. Brilinta wore off faster than rival drugs -- a benefit to patience awaiting invasive procedures that entail risks of bleeding.

Lingering Questions

AstraZeneca has submitted Brilinta for approval in Europe, and the studies bolster its case with the FDA, whose approval could make it a megablockbuster: a drug with multibillion-dollar annual revenue. Grabbing a share of Plavix's $9 billion market could greatly help AstraZeneca's $31.6 billion in yearly sales.

Though the studies give AstraZeneca a compelling marketing edge, the road ahead isn't clear. The FDA needs to examine two problems with Brilinta: a higher incidence of breathlessness that could suggest an impact on lung function, and an unexplained lack of benefit over Plavix in U.S. patients, perhaps due to higher aspirin intake.

Generic Concerns

And generic competition on AstraZeneca's high-margin products, having already hurt sales, will likely increase. The company has good distribution of 11 blockbuster drugs (drugs that have more than $1 billion in annual sales) worth nearly 80% of the revenue, but nearly 30% of that figure is at risk, as patents expire in the next five years -- including the patent for Nexium, the third-largest drug worldwide in 2008, with annual sales of $5.2 billion.

Brilinta could help AstraZeneca sales -- as could oral anti-diabetic drug Onglyza, recently approved by the FDA. But Astra recently pulled regulatory submissions for experimental lung-cancer drug Zactima, hurting the company's growth prospects. Until Brilinta is approved, it's likely investors will remain skeptical.
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