The HealthCare segment at Bayer (BAYRY) announced the initiation of a new study on its pulmonary hypertension (PH) drug, Adempas (riociguat). The company initiated a phase IIb RISE-IIP (Riociguat in Patients with Symptomatic Pulmonary HypErtension associated with Idiopathic Interstitial Pneumonias) study (n=120) on Adempas, which will be evaluating the efficacy and safety of the drug in patients suffering from symptomatic PH associated with idiopathic interstitial pneumonia (:IIP).

The study will be run in over 50 sites in 11 countries around the globe. Bayer stated in its press release that results from the study will be helpful for the company to understand the effect of Adempas on the disease. Bayer will decide the future prospects of Adempas in this indication based on these results.

Earlier in the year, Adempas was approved in the EU for the treatment of adults suffering from persistent/recurrent chronic thromboembolic pulmonary hypertension (:CTEPH) or inoperable CTEPH following surgical treatment. The drug is also approved for the treatment of adults suffering from pulmonary arterial hypertension (PAH) as a monotherapy or in combination with endothelin receptor antagonists (ERA). We note that Adempas is already approved in the U.S. and several other countries for the CTEPH and PAH indications.

We are encouraged by Bayer’s progress with Adempas. Successful label expansion of the drug will boost sales further. Over the last few quarters, Bayer’s HealthCare segment has been performing impressively on the back of its newly launched products like Xarelto (anticoagulant), Eylea (eye drug), Stivarga (oncology), Xofigo (oncology) and Adempas.

The products posted combined sales of €598 million in the first quarter of 2014 and are expected to contribute around €2.8 billion to segmental sales in 2014. We expect these products to continue to drive growth at the company in the coming quarters as well.

Bayer currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the healthcare sector include Allergan Inc. (AGN), Gilead Sciences Inc. (GILD) and Alexion Pharmaceuticals, Inc. (ALXN). While Allergan and Gilead carry a Zacks Rank #1 (Strong Buy), Alexion holds a Zacks Rank #2 (Buy).

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