Vaccines Are Emerging As Pfizer’s USP
Pfizer (NYSE:PFE) recently announced its decision to acquire two meningitis vaccines, Nimenrix and Mencevax, from GlaxoSmithKline (GSK) for $130 million. [1] Both vaccines are approved for commercial sales and the move builds upon Pfizer’s last year’s acquisition of NeisVac-C. So, why is Pfizer so interested in these vaccines? The company already has strong presence in pneumococcal vaccines with near monopoly in the U.S. Its Prevenar franchise counters pneumococcal diseases such as pneumonia and meningitis. The recent acquisitions focusing on meningitis caused by Neisseria meningitidis will help Pfizer leverage its strong market position to further strengthen its presence in the global vaccine market. The current sales of these vaccines are not reported by GSK. However, based on the relatively low acquisition price and the fact that GSK does not report them separately, we suspect that the current sales of these vaccines are relatively low. We believe that Pfizer is expecting to gain meaningful share in the meningococcal vaccine market, going forward. The global market is expected to hit $3.76 billion by 2019.
Our price estimate for Pfizer stands at $35, implying a slight premium to the market price.
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Pfizer’s current vaccines business is almost solely powered by Prevenar franchise. This vaccine prevents pneumococcal diseases such as pneumonia and meningitis. With no significant competition in the market, the Prevenar franchise has the potential to drive a significant portion of Pfizer’s growth. Prevenar is currently Pfizer’s 2nd biggest brand in terms of sales after Lyrica, and could well become the biggest brand in the next year or so. We expect the franchise’s sales to increase from $4.46 billion in 2014 to $6.67 billion by the end of our forecast period (out to 2021). Research firm Datamonitor expects the U.S. pneumococcal vaccine market to grow to $2 billion by 2019, which will be almost entirely dominated by Prevenar 13. In addition to this, it expects top 5 European markets to account for almost $3.5 billion in pneumococcal vaccine sales by 2019, with Prevenar 13 having a near monopoly again. We believe that Pfizer will leverage its monopolistic position in the market and build Prevenar into a very strong franchise over the next few years.
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Pfizer Gets Drug Approval For Hot Flashes, Targets 33 Million Women In The U.S.
October 8th, 2013 by Trefis Team
The FDA recently granted approval for Pfizer’s (NYSE:PFE) Duavee, which has been developed by its wholly-owned subsidiary Wyeth in collaboration with Ligand Pharmaceuticals Inc. [1] The drug introduces a novel approach to treating hot flashes in menopausal women, and is also approved for the treatment of postmenopausal osteoporosis (common bone disease due to low estrogen levels). Unlike other drugs in the market, Duavee pairs conjugated estrogen (CE) with an estrogen agonist/antagonist (also known as a selective estrogen receptor modulator). The drug has the advantage of protecting uterus lining against hyperplasia, which increases risk of cancer of uterine lining and can happen with estrogen-only treatments. [1]
Given the reduction in cancer risk, we expect the drug to gain traction. There are approximately 33 million women in the U.S. between the ages of 45-59 (menopausal), and most of them experience hot flashes. [1] The quality of life can get significantly affected if this common condition is left untreated. Pfizer’s existing drug Premarin, which primarily consists of conjugated estrogen, earned over $1 billion in revenues in 2012. We expect Duavee to cannibalize some of Premarin’s sales starting from the first quarter of 2014. Furthermore, given that Pfizer is a well diversified company with several other major drugs, Duavee’s success will lead to only a small incremental value add.
- Pfizer Enters Into Agreement To Acquire Nimenrix And Mencevax From GlaxoSmithKline, Pfizer Press Release, Jun 22 2015 [↩]