Pfizer (NYSE:PFE) could be mulling to seek an early approval for its experimental advanced breast cancer drug, PD-0332991, following strong efficacy and safety exhibited by the drug in recently concluded mid-stage trials.  The drug will be a part of Pfizer’s oncology division, and if approved as a first-line treatment, it could bring multi-billion dollars in revenues.
While there is no clarity at this stage, if the FDA pays heed to Pfizer’s application and grants the drug an early approval before conclusion of late-stage trials, there could be upside to our $27 price estimate as we have not yet considered the potential revenues from the drug in our model.
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Impressive Results: Open The Way Ahead
Bolstered by recent FDA approvals for two of its blockbuster potential drugs (Read Pfizer Secures Coveted FDA Approval For Eliquis and Pfizer Receives Big Boost As FDA Approves Rheumatoid Arthritis Drug), Pfizer would want to continue to show the investors that there is no gap in its pipeline in near term following these approval. The FDA has also shown its willingness to grant early approval if any drug shows strong clinical efficacy as has been witnessed with recent approval of JNJ’s experimental drug, Bedaquiline or Sirturo, for multi-drug resistant TB patients, making it the first drug with new mechanism to be approved for TB in the last 40 years (Read: Johnson & Johnson Updates: Receives FDA Approval For New Tuberculosis Drug). Some cancer drugs including Pfizer’s own Crizotinib ( marketed as Xalkori) are also on the list of drugs approved before conclusion of final trials. 
PD-0332991 has displayed impressive efficacy in mid-stage clinical trials. When taken with Letrozole (a conventional drug for the disease, manufactured as Femara by Novartis), it delayed the worsening of symptoms in breast cancer patients by more than 18 months over those with Letrozole alone (total 26 months against 6 months of Letrozole alone).  The 18 month is statistically significant difference. And with these results and the FDA’s history of granting early approvals to such drugs, Pfizer may not want to wait for results for final-stage, which has yet to begin and could conclude as late as 2015-16. The drug maker is already many years ahead with major competitors, who are developing similar drugs. 
Oncology Franchise: Robust Growth Ahead With Potential Upside
Pfizer has had a relatively limited presence in the oncology drugs market with a few successful products, including Sutent and Aromasin, generating most of the sales. Sales from this division were close to $2.3 billion, a meager 5% of total revenues in 2011. With the 2011 loss of patent protection for its Aromasin, a breast cancer drug, nearly 15% of its total oncology sales remained exposed to generic competition.
Nonetheless, we expect robust growth in Pfizer’s oncology division going forward due to its current drugs and an impressive pipeline that too without including potential sales of PD-0332991. Its Sutent (sunitinib), mainly used to treat metastatic-renal cell carcinoma or “mRCC” (an advanced kidney cancer), is expected to exhibit continued growth in sales. With GSK’s Votrient, considered as a significant threat, showing no major benefits over Sutent in a recently concluded COMPARZ trial,  we expect Sutent’s sales to double from $1.1 billion currently to cross $2 billion by the end of our forecast period.
We believe Sutent may continue to dominate the RCC market due to its strong brand recall amongst physicians and historically proven track record. The drug is also approved to treat rare types of pancreatic and stomach cancer. The recent approval of Inlyta as a second-line treatment in mRCC segment will also add to the growth. The drug is prescribed to patients who have failed to respond to treatments with Pfizer’s Sutent and thus, it would help to tap additional revenues from patients who have failed to respond to Sutent.
Xalkori, a non-small cell lung cancer drug, is another major drug in Pfizer’s offings. The drug is approved for non-small cell lung cancer has seen a strong uptake since launch. Further, it received conditional approval from the European Medicine Agency in October 2012 for use in adult cancer patients who have received at least one treatment for lung cancer. A recent American Society of Clinical Oncology’s study also found the drug to completely eradicate indications of three deadly tumors relating to nerves, blood and soft tissue in some children.  Despite a small number of eligible patients currently, we expect the drug to generate sales of nearly $1 billion by 2015 with its steep price tag of close to $9,000 per month and addition of new indications.
If, however, we were to include the potential $5 billion peak sales of PD-0332991, expected sales would be much higher than we currently anticipate. While we will wait for more details to emerge to include the potential sales of the drug, you can see the impact on our price estimate by adjusting the chart below.Notes:
- Pfizer May Push $5 Billion Breast Cancer Hope for Ruling, Bloomberg, Jan 10 2013 [↩] [↩] [↩]
- Pfizer breast cancer drug delays progression 18 months, Reuters, Dec 5 2012 [↩]
- GSK’s Votrient non-inferior to Pfizer’s Sutent, trial shows, Pharmatimes, Oct 1 2012 [↩]
- Pfizer Lung Drug Stops Deadly Child Cancers in Study, Bloomberg, May 18 2012 [↩]