Pfizer Crafting a Post-Patent Game Plan

Pfizer (NYSE:PFE) might not have anything lined up to replace its mega-selling cholesterol drug Lipitor when that treatment losses U.S. patent protection Nov. 30. But you have to give the company an “A” for trying to find creative ways to make up for the revenue loss it will suffer when generic competitors start eating away at the Lipitor franchise. A good example is a potential new indication for the Pfizer blockbuster Lyrica.

Lyrica already was doing quite well for Pfizer. In 2007, it became the first treatment approved by the Federal Drug Administration to help relieve the chronic, widespread muscle pain of fibromyalgia. Fibromyalgia is a medical condition with symptoms that often include muscle tenderness, morning stiffness and fatigue. A great part of Lyrica’s success can be traced to studies showing that the drug provides significant pain relief in as early as one week for some patients.

In 2010, Lyrica sales were $3 billion, and it appears that figure will be surpassed this year. In the second quarter alone, revenue for the treatment was more than $900 million.

Sales could get another boost now that Lyrica has shown potential as a standalone treatment for epilepsy. Already approved for use as an “add-on” treatment for seizures, Pfizer had been studying Lyrica as a single treatment for partial seizures. The world’s biggest drug-maker recently stopped that study on the recommendation of an independent committee when results showed the drug was working so well.

Now Pfizer has to decide whether it wants to ask the FDA to approve Lyrica as a “monotherapy” for partial seizures, thus extending the size of the market for the drug.

Partial seizures are the most common type experienced by people with epilepsy. They are limited to one side of the brain, according to the Epilepsy Foundation, based in Landover, Md. Virtually any movement or sensory or emotional symptom can occur as part of a partial seizure, including complex visual or auditory hallucinations.

GlobalData, a U.K.-based specialist in drug industry analysis, says the global epilepsy market is growing slowly and is forecast to reach $9 billion by 2017. Growth is dragged down due to generic competition following patent expirations of leading second-generation antiepileptic drugs

In addition to Lyrica, other currently available epilepsy treatments include Pfizer’s Neurontin; Lamictal, from GlaxoSmithKline (NYSE:GSK), which had sales of $326 million last year; Topamax, from Johnson & Johnson (NYSE:JNJ), which brought in $287 million in sales; and Brussels-based UCB’s Keppra, which generated sales of $241 million in 2010.

Incremental sales from Lyrica’s use in epilepsy are unlikely to make much of a dent in the $10 billion annual revenue haircut Pfizer is expected to suffer once Lipitor loses patent protection. Then again, every little bit helps. The company also is counting on the arthritis drug tofacitinib to help fill the gap.

As reported here about a month ago, one analyst, Catherine Arnold, told Bloomberg that tofacitinib is a potential challenger to the Abbott Laboratories (NYSE:ABT) blockbuster injectable Humira. She called the Pfizer drug a “game-changer” and said it may bring in more than $2.6 billion a year.

Who knows? With a few more drugs like Lyrica and tofacitinib, Pfizer could one day resume its role as an investor favorite.

Barry Cohen is long PFE, GSK and JNJ.

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