Pfizer (NYSE:PFE) received a setback as the U.S. Food & Drug Administration (FDA) rejected its application for the central nervous system drug, Tafamidus, while seeking more data and clinical trials to prove the efficacy of the drug.((FDA seeks more data on Pfizer rare disease drug, Reuters, June 18 2012))
The drug targets a rare and genetic fatal disease called transthyretin familial amyloid polyneuropathy (TTR-FAP) wherein patients lose the ability to walk and eventually become bedridden as the disease advances.  This is certainly not the news the drug maker would have hoped for as the company strives to build an attractive pipeline to make up for the revenue losses from upcoming patents expiry in next few years.
Our price estimate for Pfizer stands at $25.11, implying a premium of 11% to the current market price.
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While the FDA has rejected the drug this time, we expect Tafamidus to get approval eventually as the drug was approved in Europe late last year and is sold under the brand Vyndaqel. If, however, our belief is proved wrong, this will likely have an impact on the company’s central nervous system (CNS) segment, which contributes nearly 12% value to our $25.11 price estimate.
Pfizer currently commands nearly 10% market share, and we expect this to rise further to 11-12% with the help of a range of products such as Lyrica, Geodon, Pristiq and Tafamidus.Notes: