Last week, the FDA granted breakthrough therapy designation to Pfizer’s (NYSE:PFE) experimental advanced breast cancer drug PD-0332991 or Palbociclib.  The FDA grants breakthrough status to drugs that are likely to demonstrate substantial improvement over existing drugs in treating serious diseases. The intent behind granting breakthrough status is to expedite development and regulatory approval of such drugs. Earlier rumors suggested that Pfizer may be planning to apply for early approval of the drug and the status could come in handy should it decide to do so. Below we take a look at the drug and its impact on Pfizer.
What Does Palbococlib Do?
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Palbociclib targets HER2-negative breast cancer patients, which make up about 60-70% of total breast cancer cases.  Breast cancer is the most common form of cancer worldwide, with millions of women being affected by the disease. While there are a number of ways to treat the condition, including surgery, chemotherapy and targeted drugs, none of them are fully effective, which presents an opportunity for new innovative drugs like Palbociclib.
The drug works on a completely different mechanism compared to other breast cancer drugs currently available, including Novartis’ Femera (Letrozole), GlaxoSmithKline’s Tykerb and Bristol Myers Squibb’s Ixempra.  It recently exhibited impressive efficacy coupled with strong safety in mid-stage trials. When taken with Letrozole (a conventional drug manufactured as Femara by Novartis for the condition), it delayed the worsening of symptoms in breast cancer patients by a statistically significant 18.6 months over those with Letrozole alone (a total 26.1 months against 7.5 months of Letrozole alone). 
Huge Sales Potential Provides Room For Upside
Recently, pharmaceutical research group Decision Resources released a report which forecasts the breast cancer market in major markets to rise from $8.6 billion in 2011 to $11 billion in 2018 due to new premium-priced drugs and the addition of new patients.  Out of this, nearly 50% of the market belongs to HER2 negative patients.  With very impressive efficacy over competitors, Palbociclib, once approved as a first-line treatment, could capture a significant portion of this market.
The drug is likely to garner billions in peak revenues, with market expectations ranging from $2 billion to $5 billion. However, despite the FDA’s breakthrough status, we are awaiting more clarity on the drug’s future as Pfizer has yet to begin final-stage trials on the drug, which can could conclude by the end of 2015.  Any positive result here will lead to upside to our current $32 price estimate as we have not yet considered the drug’s full revenue potential in our model.Notes:
- Pfizer’s Palbociclib (PD-0332991) Receives Food And Drug Administration Breakthrough Therapy Designation For Potential Treatment Of Patients With Breast Cancer , Pfizer, April 10 2013 [↩]
- Growth in the Breast Cancer Drug Market Through 2021 Will Be Driven by New Entrants from Roche/Genentech and Novartis in Select Market Segments and an Increase in Incident Cases, FierceBiotech, August 16 2012 [↩] [↩] [↩]
- Pfizer’s New Breast Cancer Drug Could Be A Game Changer, Seeking Alpha, April 15 2013 [↩]
- 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 [↩]