Abbott Wants To Extract More From Humira While Pfizer Slogs Along With Lipitor

by Trefis Team
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ABT
Abbott Labs
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Pharmaceutical companies profit immensely from their best-selling drugs. Two such drugs are Humira and Lipitor and, while both fall in different therapeutic categories, they have been cash cows for their producers Abbott Labs (NYSE:ABT) and Pfizer (NYSE:PFE), respectively. While Lipitor lost its patent last year, Humira will see its patent expire in 2016. Both these pharmaceutical companies are now trying to glean as much as they can from their blockbuster drugs.

We maintain a $65.83 Trefis price estimate for ABT, implying 10% upside to its current market price, and a $25.11 price estimate for PFE, implying a 15% premium to the market price.

See our complete analysis for: Abbott Labs | Pfizer

Abbott seeks new uses for Humira

Humira is the best-selling drug in auto-immune drug market, which places Abbott as a distinguished market leader. Abbott is awaiting response from the U.S. FDA for the use of Humira to treat ulcerative colitis patients. In a recent announcement, the FDA has delayed its verdict for this new indication. [1]

Ulcerative colitis is a severe inflammatory disease of the large intestine and rectum, and affects nearly 500K people in the U.S., according to the Crohn’s & Colitis Foundation of America. Humira grossed $7.93 billion in 2011 sales, and is a brilliant prospect for Abbott. If approved for ulcerative colitis, Abbott will gain further market share in auto-immune drug market.

Humira accounts for nearly 18% of Abbott’s value, according to our estimates.

Pfizer increases Lipitor marketing

Lipitor recently collaborated with EatingWell magazine to develop a mobile application “Recipes 2 Go,” and a website “LipitorSmartLiving.com”. [2] The app and the website offer healthy recipes and exercise tips to control cholesterol.

The app also provides access to Lipitor $4 co-pay card, where users can pay and procure information for Lipitor refills. It also claims to offer the drug for less than half the average co-pay of its generics. The app will offer an additional source of income from Lipitor.

We believe this move will help Pfizer arrest the steep decline in Lipitor’s share in cardiovascular drug market and help counter severe competition from generics that has propped up post Lipitor’s patent expiration.

Lipitor contributes nearly 5% to Pfizer’s value, according to our estimates.

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Notes:
  1. Abbott’s New Use for Top Drug Humira Delayed by U.S., businessweek.com, May 22, 2012 []
  2. Pfizer adds healthy-eating app to Lipitor marketing arsenal, fiercepharma.com, May 23, 2012 []
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