Patent Expirations and Market Impact
Rivaroxaban (Xarelto)
Mechanism of Action: Factor Xa inhibitors Drug class: Small molecules Originator: Bayer; Johnson & Johnson Pharmaceutical Research & Development Indications: Cardiovascular disorders; Deep vein thrombosis; Embolism; Pulmonary embolism; Stroke; Thromboembolism; Thrombosis; Venous thromboembolism Patent expiry: First patent expired- 2024, Second patent expiry- 2026
Xarelto market revenue for fourteen years (2011-2024)
Xarelto has seen significant growth in recent years and is now Bayer's top-selling pharmaceutical product, representing a major portion of the company's revenue. As such, the drug's performance heavily influences Bayer's overall financial results. A decline in Xarelto sales can negatively impact Bayer's financial health, especially given its pivotal role in driving earnings within the pharmaceutical division.
In 2021, Xarelto's revenue declined primarily due to increased competition from other blood thinners, significant pricing pressures in markets such as China where generics became available, and higher discounts and rebates provided to healthcare providers. Although demand remained steady, these factors led to lower sales volumes, with the most notable impact in China, where the expiration of patent protection caused a sharp drop in sales. The revenue dip continued into 2022 and 2023 compared to 2020, primarily driven by rising generic competition in key markets like Europe and Canada. This competition put downward pressure on prices and reduced sales, particularly in regions where Xarelto's patents had expired. In 2024, Xarelto was already facing competition from generics in markets like Europe and Canada, with sales plunging 23.8% to €802 million ($851 million) in the third quarter, with total sales in 2024 being $3800 million. This decline was further aggravated by the entry of similar medications into the market. As a result, overall sales in Bayer's pharmaceutical segment decreased by 0.6% to €4.5 billion, contributing to a 3.6% drop in total company revenue to €10 billion. Bayer also reported a loss of €4.2 billion for the quarter, a slight improvement from the €4.6 billion loss reported the previous year. However, Bayer expects continued growth from its cancer drug Nubeqa and Kerendia, a treatment for chronic kidney disease in type 2 diabetes patients, in 2025. This growth is expected to partially offset the decline in Xarelto sales, which are projected to continue their downward trend.
How will the patent expiry of Xarelto affect the market?
Xarelto's substance patent expired in 2024, but Bayer retains a secondary patent that safeguards its market exclusivity until January 2026, contingent on favorable court rulings. This patent protection continues to generate millions in Bayer's daily revenue. In 2023, Xarelto generated approximately €4 billion in sales. While the primary patent for rivaroxaban has expired in Europe, a dosage patent helps Bayer maintain its market monopoly until 2026, provided patent courts uphold its claims.
Bayer and Johnson & Johnson are actively defending Xarelto against generic competition, with the case now in the courts. In 2021, the European Patent Authority extended the patent, but a recent ruling by the London High Court invalidated it, a decision Bayer plans to appeal. Xarelto, a blood thinner approved in 2011, is widely used to treat blood clots and contributed $4.5 billion to Bayer's sales in 2023. The drug was also part of the 2024 Medicare drug price negotiations under the Inflation Reduction Act. With the expiration of the initial patent, TaroPharma and Lupin have already launched generic versions of Xarelto under the names Taro-Rivaroxaban and RLD Xarelto, respectively. Rivaroxaban Tablets USP 2.5 mg (RLD Xarelto) is estimated to have annual sales of $446 million in the U.S. It will be interesting to observe how the introduction of generics affects Bayer's market revenue in the coming years.