Two Peas in a Pharma Pod: Pfizer Inc (PFE), Bristol Myers Squibb Co. (BMY)

Pfizer Inc (NYSE:PFE) and Bristol Myers Squibb Co. (NYSE:BMY) have a lot in common.

Pfizer’s 2012 revenue was down 10%; Bristol-Myers Squibb’s was off by 17%. Both are down because of expirations of megablockbusters they used to own. Both could be resurrected by a recently approved drug.

The same drug.

A long time coming
The Food and Drug Administration recently approved their Eliquis for the treatment of blood clots in patients with atrial fibrillation, a type of abnormal heart rhythm.

The partnership dates back to 2007 when Pfizer paid $250 million upfront and agreed to pay for 60% of the remaining clinical development in exchange for half of the profits from the drug. Bristol-Myers Squibb could also get up to $750 million in development and regulatory milestones as part of the deal.

At the time, the drug was already in phase 3 trials, which gives you a sense of how long the development process for blood thinners takes. Measuring the prevention of strokes takes a while since they don’t happen with a high frequency.

The drug would have been on the market sooner, but the companies got a complete response letter from the FDA last June. The agency declined to approve Eliquis, requesting “additional information on data management and verification” for one of the clinical trials.

A blockbuster in the making
There’s no doubt there’s a market for Eliquis. The current standard of care, warfarin, is also a component of some rat poisons. If you take too much, you’ll bleed out internally.

That’s not all that weird; there are plenty of drugs that will kill you if you take too much. The problem with warfarin is that it has a narrow therapeutic window: too little and it doesn’t work, too much and you start to bleed. Making matters worse, concomitant medications, diet, and alcohol intake can affect the required dosage.

With such an easy target to knock off, Pfizer and Bristol-Myers only set out to match warfarin’s efficacy, figuring that doctors would seek out the safer drug. Surprisingly, Eliquis actually performed better than warfarin with patients taking the new drug experiencing fewer strokes.