How Will Pfizer’s Oncology Segment Shape Up In The Coming Years?
Pfizer’s (NYSE:PFE) Oncology segment accounts for roughly 20% of the company’s value, according to our estimates. Pfizer hadn’t seen significant growth in its Oncology segment until recent years with Ibrance. Most of the company’s value can be attributed to its legacy pharma, biosimilars, and consumer segments, according to our analysis. In this note we focus on the company’s Oncology segment and its future implications for Pfizer. Take a look at our interactive dashboard of Pfizer’s business, which shows how its oncology drugs will perform in the coming years, compared to the company’s other segments. Below we explain in more detail.
Oncology Segment To Grow In Low-Double-Digits, Company-Wide Revenues Likely To Remain Flat
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Most of The Company’s Other Segments Are Expected To See Revenue Declines
Why Do We Think Other Segments Will Decline?
Many of Pfizer’s musculoskeletal, immunology, neuroscience, anti-infective, cardiovascular, and alimentary/metabolism drugs are expected to face stiff competition from biosimilars, given that the patents for most of the drugs within these segments have expired or are about to expire in the near term. Currently, there are fewer new compounds under phase 3 trials within these segments, thereby capping any significant upside.
Within Oncology, Ibrance Is The Key Growth Driver
Ibrance was first approved by the FDA in 2015 for the treatment of breast cancer, which accounts for around 25% of all cancers in women. Currently, the drug accounts for over 50% of the segment’s revenues, and we estimate the sales to be around $5 billion towards the end of our forecast period. Looking at new drugs, Bavencio is of key importance, as it can generate peak sales of $2-3 billion for Pfizer. We believe that these estimates are reasonable, given that the drug is being tested for additional indications, including gastric cancer, ovarian cancer and non-small cell lung cancer.
We currently have a price estimate of $35 for Pfizer, which is close to the current market price.
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