
Germany’s Bayer has suffered a significant setback as it terminated a large late-stage trial for its experimental anticoagulant, asundexian, citing insufficient efficacy. The news led to a 16.4% drop in Bayer’s shares, reaching their lowest point in 12 years. This decline was exacerbated by a separate announcement that Bayer had been penalized to pay $1.56 billion in a recent U.S. lawsuit related to the Roundup weedkiller.
Bayer had high expectations for asundexian, envisioning it as a replacement for the revenue generated by its pharmaceutical best-seller, the blood thinner Xarelto. Xarelto is anticipated to lose patent protection in important European markets in the next two years. The experimental drug was designed to prevent strokes in high-risk patients and was to generate annual sales of over 5 billion euros. During the Phase III trial’s midway point, it was discovered that asundexian exhibited inferiority when compared to the established Eliquis, a collaborative creation of Bristol-Myers Squibb and Pfizer.
Based on the recommendation of independent trial supervisors, the decision to halt the trial is another setback for Bayer, already grappling with challenges such as a weakened herbicide business, substantial debt, and ongoing legal issues related to Roundup in the U.S. The company’s new CEO, Bill Anderson, is looking at options to restructure the business, considering a potential separation of its divisions, including prescription drugs, crop chemicals, consumer health products, and seeds. Anderson aims to simplify decision-making processes and reduce management positions in an effort to revive the company’s struggling stock price.
The discontinuation of the trial poses significant challenges for Bayer’s pharmaceutical business, according to analysts at Barclays. This development was considered a total surprise, and the repercussions are expected to impact the company’s future growth prospects substantially. Bayer stated that it would conduct a detailed analysis of the trial data and emphasized that the safety data were consistent with previous studies.
The setback also hampers Bayer’s expansion ambitions in the United States, the largest pharmaceutical market globally. Asundexian was a key component of Bayer’s strategy for a major expansion in the U.S. Unlike the Xarelto franchise, where Bayer collaborated with Johnson & Johnson, Bayer chose to independently pursue the development of asundexian, intending to invest significantly in U.S. marketing and distribution. This decision is now viewed critically, with some suggesting that development costs should have been shared, and Bayer’s risk management is perceived to have failed.
Asundexian, belonging to a novel drug group called factor XI inhibitors, faces competition from other pharmaceutical companies like Novartis (in partnership with Blackstone) and Bristol-Myers Squibb (in collaboration with J&J). Bayer had identified asundexian as one of four new drug candidates with a combined peak sales potential exceeding 12 billion euros. The termination of the trial raises questions about Bayer’s ability to secure sustainable growth in the pharmaceutical sector.