Pfizer’s (NYSE:PFE) stock has been rising steadily on back of continued approvals nabbed by the drug maker in the last couple of months (Read Pfizer Secures Coveted FDA Approval For Eliquis and Pfizer Receives Big Boost As FDA Approves Rheumatoid Arthritis Drug). Amongst Pfizer’s drugs that are now awaiting major regulatory approvals, we think its oncology drug, Bosulif, will be the first one to clear the list since in January a committee of European Medicine Agency (EMA) had recommended that the drug be approved as second-line treatment for chronic myelogenous leukemia (a type of white blood cell cancer).  The drug has already secured FDA approval for the condition last year, and the EMA’s approval usually comes with in 2-3 months of the recommendation.
EMA approval will open the large European market to the drug, which should help the drug achieve over $300 million in expected peak sales. Below we discuss what other drugs will drive the anticipated robust growth in Pfizer’s oncology division.
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Oncology Franchise: Current Drugs Driving Growth
Pfizer has had a relatively limited presence in the oncology drugs market with a few successful products, including Sutent, Xalkori and Aromasin, generating most of the sales. Despite the loss of patent protection for its Aromasin, a breast cancer drug that garnered nearly 15% of its total oncology sales in 2011, we expect robust growth in Pfizer’s oncology division due to established as well as newly approved drugs.
Among current drugs, revenue from Sutent (sunitinib), a metastatic-renal cell carcinoma or “mRCC” (an advanced kidney cancer) drug, is expected to nearly double from current $1.2 billion by the end of our forecast period. GSK’s Votrient, which was being considered as a significant threat, had shown no major benefits over Sutent in COMPARZ trial. 
With its strong brand recall amongst physicians and historically proven track record, we believe Sutent will continue to dominate the mRCC market. The recent approval of Inlyta as a second-line treatment in mRCC segment will also help in tapping additional revenues as the drug is prescribed to patients who have failed to respond to treatments with Pfizer’s own Sutent.
Other major drug in Pfizer’s offings is Xalkori. The drug, which is approved for non-small cell lung cancer, has seen a strong uptake since launch. Further, it received conditional approval from the EMA 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.
Potential Upside From Breast Cancer Drug
However, the most significant growth could come from an experimental advanced breast cancer drug, PD-0332991, which has exhibited impressive efficacy coupled with strong safety in a recently concluded mid-stage 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 a statistically significant 18 months over those with Letrozole alone (total 26 months against 6 months of Letrozole alone). 
Various reports suggest that Pfizer may be planning to apply for an early approval of the drug,  even as the drug maker has yet to begin final-stage trials for the drug, which can only conclude by 2015-end. The drug, if approved as a first-line treatment, could bring as much as $5 billion in revenues and there could be an upside to our current $27 price estimate as we have not yet considered the full potential revenues from the drug in our model. We are in the process of updating our estimates.Notes:
- Summary of opinion, EMA, January 17 2013 [↩]
- 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 [↩]
- Pfizer breast cancer drug delays progression 18 months, Reuters, Dec 5 2012 [↩]
- Pfizer May Push $5 Billion Breast Cancer Hope for Ruling, Bloomberg, Jan 10 2013 [↩]