Pfizer: Q2 highlights and key takeaways

Pfizer hit sales numbers in the second quarter that were just under expectations, coming in a hair under the $13.1 billion consensus at $12.9 billion. Evercore ISI analyst Umer Raffat attributed the miss to one-off events - such as timing of purchases - that shouldn't carry through to upcoming quarters.

Inflectra uptake

Pfizer reported $23 million in US Inflectra revenue, along with global sales of $94 million for the Remicade biosimilar. CEO Ian Read told investors that securing reimbursement for Inflectra has proven challenging, particularly among private payers, but didn't offer specific plans to increase coverage. "To date, reimbursement coverage has been mixed," he said, adding "while we achieved 100 percent Medicare coverage, we have experienced access challenges among national commercial payers, where our lower price product has not received access at parity…and remains in a disadvantaged position despite recent price increases taken by the innovative product."

Pfizer group president John Young added that Merck & Co. and Samsumg Bioepsis' Remicade biosimilar, Renflexis, has the same average selling price as Inflectra, so pricing points are likely not a factor. "But in the commercial insurance space, access for Inflectra has been substantially limited due to J&J's pursuit of exclusionary contracting with insurers and providers," he said.

The comments are consistent with those from Johnson & Johnson, which told investors last week that biosimilars have yet to make inroads into Remicade's market share– (see Johnson & Johnson: Q2 highlights and key takeaways).

Xeljanz

Pfizer reported strong sales for Xeljanz (tofacitinib), with $336 million in revenue that was well ahead of a $285 million consensus. President of R&D Mikael Dolsten tried to placate investor concerns around a potential thromboembolic risk for the JAK inhibitor, continuing a theme seen with Gilead Sciences and AbbVie as the companies try to distance themselves from the thromboembolic events now associated with Eli Lilly's Olumiant (baricitinib). Dolsten told the investor call that "there is no causal relationship between Xeljanz and venous thromboembolism…We have not seen any signals for thrombosis. This suggests that not all JAKs are the same, and the news around baricitinib is likely to be seen as compound specific and not JAK class specific."

Dolsten joined in the chorus of JAK developers pointing toward elevated platelets as a mechanism for thromboembolism, further distancing their products from Olumiant. "Barcitinib has reported elevated platelets, thrombocytosis, which in some circumstances can be associated with increased risk for thrombosis. We have not seen that either with our Xeljanz inhibitor," Dolsten noted.

The FDA's Arthritis Advisory Committee will meet August 3 to discuss Pfizer's proposed label expansion for Xeljanz into active psoriatic arthritis. In briefing documents released ahead of the meeting, the agency questioned the radiographic evidence supporting its efficacy, calling it "borderline at best," despite the compound successfully reducing ACR20 response criteria in two Phase III studies.

I/O marketplace

In the earnings Q&A, Dolsten teased the development of Pfizer's internal PD-1 candidate. He said the antibody is being developed with an eye towards "early cancers or possibly adjuvant cancers," with the possibility of monthly, subcutaneous delivery as a differentiating factor in a crowded checkpoint inhibitor market.

Questioned on the company's confidence in its Merck KGaA collaboration for Bavencio, Read said it was a "good partnership," but added that "we always review all of our strategies and all of our potentials to see how we can maximise participation in any sectors." Dolsten noted that the PD-1 candidate is also "part of the alliance" with Merck KGaA, and teased a near-term readout for the compound.

Diving deeper in the pipeline, Dolsten also shared a few details on preclinical CTLA-4 candidates. He said the company is aiming to reduce toxicity in its second-generation CTLA-inhibitors with local tumour delivery. "We've also explored CTLA-4 locally delivered with vaccines, where we think we may be able to get a different type of balance as we've seen systemically," he added.

Tax Reform

Read, never shy about voicing his opinions on tax reform, told investors that uncertainty on potential changes in tax policy was holding back business development. "I believe we need to see tax reform or the absence of tax reform to understand what the market values are," Read remarked. Chief financial officer Frank D'Amelio elaborated, checking off items for the company's ideal tax package. "First, a territorial tax system," he said, adding "two, a repatriation holiday. Three, lower corporate tax rates. And then, four…if there's going to be some minimum tax, obviously the lower the minimum tax the better."

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