US regulators want more information before they will give the go-ahead to Bayer and Johnson & Johnson’s new anticoagulant Xarelto but the decision is not seen as bad news and the German firm’s stock is on the rise this morning.

The US Food and Drug Administration has issued a complete response letter for Xarelto (rivaroxaban), an oral, once-daily drug, which was filed for the prevention of deep vein thrombosis and pulmonary embolism in patients undergoing hip or knee replacement surgery. The drug has already been approved in Europe and in March, the FDA’s Cardiovascular and Renal Advisory Committee voted 15 to 2 in favour of Xarelto despite concerns over bleeding and potential liver damage.

The FDA’s letter includes a request for more information but J&J and Bayer have pointed out that the agency has not asked for new clinical or non-clinical studies as a pre-requisite for approval. Peter DiBattiste, vice president of J&J Pharmaceutical Research Development, said that “we are confident in the positive benefit-risk profile of rivaroxaban and will promptly address the questions set forth by the FDA”.

Analysts share the companies’ enthusiasm and Morgan Stanley notes that the FDA’s letter is in line with expectations. The broker believes that Xarelto will be approved in the second half of 2009 and is predicting sales of around 2-3 billion euros per year.

Leerink Swann analyst Rick Wise was equally enthusiastic and issued a research note saying that “our impression is that the questions are not very onerous and the company expects to submit a response as quickly as possible”. He added that “we had anticipated a potential delay in Xarelto approval, and this complete response letter has no material impact to our current estimates". Mr Wise believes that Xarelto could be a $4 billion-a-year drug.

Investors also seem unconcerned about the FDA’s letter and Bayer’s shares at 10.33 this morning were up 3.1% to 40.04 euros.