A new class of anticoagulant drugs called factor Xa inhibitors have wrestled away significant market share from Warfarin, a decades-old drug widely used to prevent clots in heart disease patients and hip and knee surgery patients. However, until last year’s approval of Portola Pharmaceuticals’ (NASDAQ: PTLA) Andexxa, there wasn’t an FDA-approved medication on the market to reverse their effect — a dangerous proposition for patients at risk of falling or emergency surgery.
The potential upside associated with selling the only approved antidote to factor Xa inhibitors made Portola Pharmaceuticals enticing, but its performance so far has been hit-or-miss. This week, pessimistic investors sent shares reeling after management unveiled its first-quarter financial results. Here’s what you ought to know about the results and management’s future plans
Stocking supply shelves
Investors can’t be blamed for doubting management’s ability to market Andexxa. After all, Portola Pharmaceuticals’ first commercial-stage drug, Bevyxxa, was a dud. The company grossly overestimated the need for Bevyxxa, a factor Xa medication for the post-acute hospital setting, and as a result, Bevyxxa’s sales have failed to materialize. In Q1, they totaled just $77,000.
Overall, Portola Pharmaceuticals reported only $22.2 million in revenue in Q1, but supplying new hospitals and restocking existing hospitals could boost revenue considerably in the coming quarters
Tapping new markets
The company’s improving traction in the U.S. could suggest success in Europe, where Andexxa recently won approval to be marketed under the brand name Ondexxa.
Initially, management is focusing its European launch activity in key markets, like Germany, where it thinks it can win reimbursement quickly and where there’s a large number of factor Xa patients. Its goal is to start reporting Ondexxa product sales later this year.
Spending is a problem
High hopes for Bevyxxa and a faster path to approval for Andexxa caused Portola Pharmaceuticals to invest too heavily in head count, and unfortunately Portola’s expenses continue to threaten the company’s future.