2016 Review/2017 Preview – Pfizer

What went right, what could have gone better and what's next for Pfizer

What went right…

Among Pfizer’s biggest success stories last year was the strong performance from Ibrance (palbociclib), a breast cancer drug approved in 2015 and tipped to be the company’s most important growth driver, which was on track to reach $2 billion in sales in its first full year on the market, including $550 million in the third quarter alone.

The US drugmaker also attracted headlines in April when the FDA approved its Inflectra, a biosimilar version of Johnson & Johnson and Merck & Co.’s Remicade (infliximab) licensed from Celltrion, which Pfizer subsequently launched in the US in November. (See Spotlight On: Pfizer sets sights on a long term biosimilars play with Inflectra launch.)

Physician Views Poll Results: Awareness of biosimilar Remicade high and willingness to use improving; just don't take the decision out of their hands

Never one to shy away from business development, Pfizer was as usual one of the busier biopharma buyers last year, announcing two multi-billion-dollar acquisitions – Anacor for $5.2 billion in June and Medivation for $14 billion in September – in addition to a raft of smaller deals.

What could have gone better

Pfizer once again came up short in an attempt to find a successor to Lipitor, its one-time flagship dyslipidaemia drug, as the company decided to shelve bococizumab after having invested considerable time and resources into development of the anti-PCSK9 mAb for both clinical and commercial reasons. In fact, the company was similarly forced to give up on CETP inhibitor torcetrapib a decade ago. (See See Spotlight On: Bococizumab setback may be symbolic rather than material – but is Pfizer at another crossroads?)

In contrast to the many deals that did go through, it was one that got away – a failed merger with Allergan that would have allowed Pfizer to re-domicile outside the US – that attracted the most attention, in part because the proposed $160-billion transaction ultimately unravelled after the Treasury Department rewrote its rulebook to block it and other inversion deals. (See The Q&A – Why Pfizer's $160-billion merger with Allergan may not happen.)

As for Pfizer’s decision to once and for all set aside plans to breakup into distinct companies, which it had been talking about doing off and on for years, some investors may have concluded not doing so was a mistake, though management clearly felt otherwise.

What comes next…

There has been much talk about a possible wave of M&A transactions coming in 2017, with part of the rationale being that corporate tax reform measures mooted by US president-elect Donald Trump – namely lower rates on both profits and repatriated funds – would significantly increase the amount of cash big pharmas have to play with.

Even after its busy 2016, Pfizer is still among the companies thought to be most acquisitively inclined thanks to its need to pad a pipeline that analysts like Bernstein’s Tim Anderson have warned is looking worryingly thin. With $10 billion offshore and more than $23 billion in deferred tax liabilities, business development will almost certainly be on the company’s to-do list in 2017. (See ViewPoints: Is a ‘Trumped-up trickle-down’ buying bonanza on the way?)

Beyond the realm of the hypothetical, Pfizer is likely going to face some notable commercial headwinds in 2017. Among these are looming competition for Ibrance and rheumatoid arthritis drug Xeljanz (tofacitinib) from the likes of Novartis’ ribociclib and Eli Lilly’s baricitinib, respectively, with decisions from the FDA for the latter two coming in the next few months.

Execution will also be the name of the game as Pfizer looks to build on the success of Ibrance by leaning on its growing portfolio of oncology products, including prostate cancer drug Xtandi (enzalutamide) from Medivation and avelumab, a PD-1 inhibitor partnered with Merck KGaA that is under priority review at the FDA for Merkel cell carcinoma.

Pfizer will also hope to get off to a strong start with Eucrisa (crisaborole), which it obtained in the Anacor transaction and received approval in the US just last month. The company has taken a bullish stance on the atopic dermatitis drug, predicting it could deliver peak sales north of $2 billion, though a recent discussion with a KOL suggests Pfizer will have its work cut out for it.

KOL Views: Leading dermatologist believes that Eucrisa, Dupixent have vastly different profiles, growth prospects

Physician Views Poll Results: 70 dermatologists provide feedback on market potential of Pfizer's crisaborole for mild-to-moderate atopic dermatitis

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