Pfizer‘s (NYSE:PFE) Inlyta (axitinib) has received European Medicines Agency (EMA) approval, which means the drug can now be prescribed for advanced renal cell carcinoma (RCC) as a second-line treatment in the European market.  This news adds to the list of positive developments for the drug this year, including the U.S. FDA approval as a second-line treatment for advanced RCC. The European Commission’s approval will open a bigger market for the drug, which lends support to our expectations of continued rapid growth in sales of Pfizer’s oncology franchise in foreseeable future .
RCC is a kind of kidney cancer that requires surgery, but many patients continue to show signs of RCC even after undergoing surgery. That is when a second-line treatment becomes necessary. Many pharmaceutical companies including Pfizer are striving hard to address the RCC market as it is not entirely curable in most patients. Pfizer’s commitment toward RCC therapeutics is commendable with many exciting drugs in its portfolio.
Its drug Sutent (sunitinib) is an established drug and has displayed promising results for RCC patients previously. The drug is also approved to treat rare types of pancreatic and stomach cancer. While the drug faces competition from Bayer, GlaxoSmithKline (GSK), Novartis and Roche Holdings (PINK:RHHBY) in a crowded market, the competition remain weak as of now. Bayer’s Nexavar is a first-line drug, but it has failed to show encouraging results. Roche/Genentech’s Avastin is also approved in the U.S. and Europe for RCC, but its efficacy as a first-line treatment is questionable. The only drug that poses a threat to Sutent as a first-line treatment for advanced RCC is GSK’s Votrient. However, the drug is currently under clinical trials (outcome expected in 2013) to compare its benefits over Sutent. Barring any unfavorable outcome (showing major benefits of Votrient against Sutent), we currently expect the Sutent’s sales to double from current $1.1 billion to cross $2 billion by the end of our forecast period.
In addition to Sutent, the company now has another arrow in its quiver, Inlyta, which is making inroads into this segment as a second-line treatment. The drug, which typically helps delay the occurrence of the indication, will be prescribed to patients who have failed to respond to treatments with Pfizer’s Sutent. Thus, it will help bring in additional revenues from patients who have failed to respond to Sutent. However, the drug faces stiff competition from several other drugs including Novartis’s Afinitor and many analysts have pegged the peak sales at $500-$600 million.
All of these factors will likely bolster the oncology franchise of Pfizer and strengthen our expectations that the company will more than double its sales in this segment to surpass $8 billion by the end of Trefis forecast period.
We currently have a $25 price estimate for Pfizer, which is nearly 5% above the current market price. We are in the process of revising our price estimate to reflect the recent developments and the earnings.Notes: