Pfizer May Have Found a New Hit Drug

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It doesn’t appear Pfizer (NYSE:PFE) has any blockbusters up its sleeve, but the company has successfully added some big-selling medications that could help ease the pain when cheaper generic copies start eating away at the company’s multi-billion dollar seller Lipitor cholesterol drug this November.

The world’s largest drug company is counting on the arthritis pill tofacitinib to join the fold of key offerings. If so, it will link up with Pfizer’s other recent acquisitions in pain and inflammation to ease the sting of losing patent protection for Lipitor. The company’s arthritis drug Enbrel, which it gained in the purchase of Wyeth in 2009, was Pfizer’s second-best seller last year with revenue of more than $3 billion. Last year’s purchase of King Pharmaceuticals brought Pfizer several additional painkillers.

At least one analyst thinks Pfizer has hit a home run with tofacitinib. Catherine Arnold told Bloomberg that the new drug is a “game-changer,” and may bring in more than $2.6 billion a year. She emphasized the estimate could be conservative given the current market for rheumatoid arthritis is $22 billion. The Pfizer treatment offers a dosing advantage because it’s given orally instead of injected like the other drugs on the market.

Last week, new data from a trial of tofacitinib showed the medicine was as effective as Abbott’s (NYSE:ABT) blockbuster injectable Humira, which will generate sales approaching $8 billion this year. The only potential sticking point was that proportion of patients who developed serious side effects, though small, was higher in the tofacitinib groups.

“Impressive efficacy was demonstrated, with focus now expected to be on safety leading into its regulatory review,” Jeffrey Holford, an analyst at Jefferies & Co, said in a research note, according to Reuters. “While the market was expecting a similar efficacy between the higher dose of tofacitinib and Humira, the strong performance of the lower dose is impressive.”

Pfizer said the company believes the risk-benefit profile supports regulatory submission for both the 5- and 10-milligram dose. “We are looking forward to filing in the U.S., EU and Japan by the end of the year,” company spokesperson Victoria Davis told Bloomberg.

Wells Fargo analyst Larry Biegelsen thinks both doses of the drug will get Food and Drug Administration approval next year. He added that it will probably be a few years before the drug should materially hit Humira sales because the Pfizer treatment will initially be prescribed mainly for patients who have failed to benefit from standard treatments. This should change as Pfizer moves its use to earlier treatment

In addition to Humira, the other injectable drugs that dominate the market include Remicade from Johnson & Johnson’s (NYSE:JNJ) and Enbrel from Amgen (Nasdaq:AMGN), which Pfizer shares.

Tofacitinib is the most-advanced pill in a family of experimental drugs to target a protein, called JAK, which leads to joint destruction in 1.3 million Americans with rheumatoid arthritis. Three biotechnology companies are working to catch up to Pfizer with similar treatments: Rigel Pharmaceuticals (Nasdaq:RIGL), Incyte and Vertex (Nasdaq:VRTX). However, all these drugs are in earlier stages of development.

At the time of publication, Barry Cohen was long Pfizer, Johnson & Johnson and Amgen.

 


Article printed from InvestorPlace Media, https://investorplace.com/2011/09/pfizer-may-have-found-a-new-hit-drug/.

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