Oncology Drugs, Eliquis And Biosimilars Will Drive Pfizer’s Future Growth

by Trefis Team
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Pfizer (NYSE:PFE) recently posted its Q2 results, which were above street estimates. The company’s overall sales grew 4% while adjusted earnings per share grew 21%. As expected, the company saw higher sales for Ibrance, Eliquis, and Xeljanz, which aided the overall earnings growth. Looking forward, we continue to believe that the company’s Oncology portfolio will lead growth, along with its biosimilars, such as Inflectra, and Eliquis, which is on a stellar run currently. We have created an interactive dashboard ~ What Is The Outlook For Pfizer ~ on the company’s expected performance in 2018. You can adjust the revenue and margin drivers to see the impact on the company’s overall revenues, profits, earnings, and price estimate.

Expect Oncology And Legacy Pharma, Consumer, Biosimilars & Others To Lead Future Growth

We expect the company’s Oncology segment to see strong growth in 2018, and beyond, partly led by a ramp up in Ibrance sales. Ibrance is used for the treatment of breast cancer, which is the most prevalent cancer type in women, which means that the drug targets a very broad set of patients. The drug sales were over $1 billion in Q2 2018, and we forecast it to be around $4 billion for the full year. Apart from Ibrance, Pfizer has a strong Oncology pipeline, which includes new drugs, such as Dacomitinib and Talazoparib, which will aid the future growth.

Among other segments, we forecast Musculoskeletal segment revenues to decline in low single digits, as an expected double digit growth in Xeljanz will likely be offset by a decline in Enbrel and other drugs. Xeljanz has been doing well of late, and saw sales jump over 30% in H1 2018. Its recent approval for Ulcerative Colitis will bode well for the future sales growth. Most of the other pharmaceutical segments will likely see a decline in the near term, due to loss of patent exclusivity for key drugs. However, we forecast mid-high single digit growth in the Legacy Pharma, Consumer, Biosimilar & Other segment. This can primarily be attributed to Eliquis, which was jointly developed by Bristol-Myers Squibb and Pfizer, and has seen strong growth in the recent quarters, led by market share gains. In fact, the drug now accounts for more than half of the prescriptions in the NOAC (novel oral anticoagulant) market, according to the company’s management. Eliquis’ revenues grew by an impressive 40% in H1 2018, and it is expected to continue to grow at a strong pace in the near term. The segment’s future growth can primarily be linked to its biosimilars, some of which are currently in phase 3 pipeline. Pfizer’s biosimilar Inflectra is seeing some growth in Europe, and it has garnered over $300 million in H1 2018. The drug will likely gain some market share from Johnson & Johnson’s blockbuster drug Remicade. 

We now have a $45 price estimate for Pfizer, which implies a premium of over 10% to the current market price.

 

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