Analyst's worst-case on Brilinta probe? Feds force AstraZeneca blood thinner off market

By Tracy Staton and John Carroll

Last week, AstraZeneca ($AZN) admitted that the U.S. Justice Department is probing its controversial late-stage study of the blood thinner Brilinta. After a few days to digest that information, Bernstein's Tim Anderson has spelled out a worst-case scenario for the drug--and it's none too pretty. Worse, Brilinta is one of the products CEO Pascal Soriot hopes to transform into a growth engine for the company.

AstraZeneca is stonewalling analysts on what exactly triggered the federal probe. "All we can really say is that on October 21, we did get a civil investigative demand from the U.S. Department of Justice," CMO Briggs Morrison said last week. "It is regarding PLATO, the clinical pivotal trial for the approval of Brilinta. We'll of course cooperate with the inquiry. And we really can't give any details on that ongoing investigation."

But Anderson zeroes in on the likely cause: pointed criticism from a small group of outside experts, who suggest that some data produced by that Phase III Brilinta study was rigged.

Government investigations of Big Pharma companies have been more the norm than the exception, as Anderson notes today--and Johnson & Johnson's ($JNJ) $2.2 billion settlement yesterday attests. But if the Brilinta probe is about rigged data, and if the feds conclude someone fixed the results to make the drug look more effective than it really was, we're not talking about the usual heavy fines, Anderson figures. "[I]t is in the realm of possibilities that something really bad could happen to Brilinta/Brilique," he writes.

The probe could end up forcing the drug off the market, Anderson figures. So far, that threat is low-risk, he emphasizes. But with consensus models projecting $1.6 billion in sales for Brilinta--a drug with a 70% margin--the doomsday scenario would claw out 15% of the company's expected profits. And that's something no investor should overlook.

When Soriot joined the company last year, Brilinta was widely seen as a laggard. It faltered on launch and failed to gain much traction. But Soriot saw an opportunity to turn that around. He's been putting resources behind Brilinta promotion, with advertising and a bigger salesforce, focused not only on hospitals but on primary-care doctors. The company has also successfully persuaded managed care payers to revise their formularies and boost patient access to the drug.

So far, Brilinta's sales amounted to just $75 million for the third quarter, far from Soriot's blockbuster goals. But that's up from $24 million for the same period last year. During the third-quarter earnings call, Soriot reminded analysts that he's looking for the Brilinta moves to really deliver toward the end of this year. When full-year 2013 results come in, he promised, the campaign will be tweaked accordingly.

When Anderson asked Soriot about the Brilinta investigation during last week's earnings call, Soriot pooh-poohed any suggestion that the DoJ probe would affect its marketing. "We haven't got any restriction on sale or promotion of Brilinta as a result of the investigation," Soriot said. "As you can imagine, we support the investigation and [will] cooperate as much as necessary. There's no impact we can see on our sales and no restriction to our promotional activities."

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