FDA delivers Xarelto bad news to J&J, Bayer

The expected news on Xarelto has been delivered to Johnson & Johnson ($JNJ) and Bayer. In its complete response letter, the FDA turned down their request that it be approved to prevent heart attacks and strokes in patients with acute coronary syndrome, a common heart ailment, a use that would have significantly enhanced the drug's financial value.

The negative response was put into the inevitable category in May when an FDA advisory committee recommended against approval because of missing data after nearly 1,300 patients dropped out early of a 15,526-subject, final-phase study and withdrew consent for access to their health information. There are also concerns about bleeding risks for the class of drugs that are an alternative to warfarin. 

Sold by Johnson & Johnson in the U.S., Xarelto is now approved to prevent strokes in patients with atrial fibrillation and reduce the risk of blood clots in certain surgery patients, a market that in addition to the workhorse warfarin, includes one of the new-generation warfarin alternatives, Boehringer Ingelheim's Pradaxa. Others are in line for approval, including Pfizer ($PFE) and Bristol-Myers Squibb's ($BMY) entrant Eliquis, which some consider the likely market leader in AF patients.

For ACS patients, Xarelto would have been the sole warfarin alternative approved in a market that an analyst told Bloomberg could be worth more than $1 billion. It would compete with AstraZeneca's ($AZN) Brilinta and Eli Lilly's ($LLY) Effient, and market-watchers think it could dominate.

J&J owns U.S. rights to the medicine while Bayer sells the drug in Europe.

- here's the Bloomberg story