Pfizer Inc. (PFE -1.00%) came up strong last quarter, topping analyst estimates by a hefty margin. In particular, the world's second biggest drugmaker by revenue is gaining traction in the therapeutic market of cancer--one of the hottest and most lucrative areas in medicine. Global oncology revenues soared 54% to $1.1 billion last quarter, driven in large part by strong sales of Pfizer's first-in-class cancer treatment, Ibrance.
Ibrance left the launchpad barely a year ago , but the drug has already zoomed to the No. 1 spot as the preferred treatment for advanced breast cancer. According to Pfizer, Ibrance has now captured 40% of that market. The new drug also hauled in $514 million last quarter, meaning it is clearly going to break into blockbuster territory this year.
Better late than never
A scant decade ago, Pfizer wasn't even a player in cancer. But with the two drugs then bringing in the biggest chunk of its sales--Lipitor and Viagra--headed for the patent cliff, the company switched gears and made a bold decision to tackle cancer with a two-pronged attack. The first phase included developing more traditional chemotherapy agents, but the follow-on R&D was more important--researching a promising new class called immuno-oncology.
Immuno-oncology drugs stimulate the immune system to mount a stronger defense against cancer through a variety of mechanisms. Ibrance is the first in a brand new sub-group of these drugs, CDK4/6 inhibitors, which play a vital role inhibiting the growth of tumor cells. While both Novartis (NYSE:NVS ) and Eli Lilly (LLY 1.80%)have similar drugs in development, Pfizer's lead just got bigger a few days ago, when one of the contenders hit a pothole.
What happened? A trial monitoring committee decided Lilly's late-stage CDK4/6 inhibitor (ademaciclib) had fallen short of its efficacy criteria. That puts ademaciclib way behind Ibrance, since Lilly likely won't be able to launch the drug until 2018. And there's more good news in this race. Although Novartis is also studying its inhibitor in new indications, Pfizer has the lead there as well.
But Pfizer's bid to become an oncology powerhouse goes far beyond Ibrance. The company has an extremely broad portfolio of immuno-oncology therapies, and even a collaborative cancer research strategy with a former big competitor, Merck & Co. Inc. (MRK -1.16%).
Let's dive deeper into Pfizer's prospects beyond Ibrance, and see what the company's cancer aspirations could mean to both shareholders and patients.
Wait, cocktails could someday cure cancer?
Pfizer's partnership with Merck revolves around exploring the potential of using each company's respective drugs as combo, or "cocktail" treatments. Currently, most advanced cancer meds only prolong life for a few months. But the new "cocktails" promise to add years to survival, and perhaps even someday provide a cure. According to Liz Barrett , Pfizer's president of global oncology, "Ultimately, many researchers believe that to cure cancer you'll have to have combinations, and we feel like we have the broadest portfolio of immuno-oncology compounds."
Barrett also made it clear that Pfizer's new recipe for success will focus highly on collaboration. In particular, she claims the Merck partnership has already helped both companies up their game in cancer. "We have to hold each other accountable, which is a good thing," she said. "That's really the foundation of our [immuno-oncology] strategy."
One example is Inlyta, Pfizer's kidney cancer chemotherapy approved in 2012. As part of an older class of drugs, Inlyta is already facing competition from new immuno-oncology drugs. But Pfizer is not trying to beat those meds--it will join them. Inlyta is being studied as a combo drug with both Pfizer's own drugs, as well as Keytruda, the blockbuster immunotherapy developed by Merck.
With cocktails and combo regiments the coming thing, Barrett sees a huge role for Inylta. "We expect it to be the preferred agent for combinations," she said.
Bottom line
Pfizer has been winning some decisive battles and losing some as well in the past few years, but it has ultimately ended up with a very strong pipeline in cancer. Currently, the company has over 25 clinical trials in oncology, including more than a dozen compounds in Stage 3, where the chance of FDA approval for cancer drugs can be as high as 90%. In fact, the FDA has approved so many targeted cancer therapies recently; they now make up about 46% of all cancer sales, a huge leap from 11% just a decade ago.
The upshot is that Edward Jones analyst Ashtyn Evans thinks that Pfizer could boost cancer drug sales to about 10% of revenue by 2020, up from barely 4% in annual revenue last year.
Beyond the numbers, there's another story. The newer targeted drugs from companies like Pfizer are generally less toxic and provide better patient outcomes, according to the National Cancer Institute . And as cancer treatment moves away from a "one size fits all" approach to more options for personalized treatment, Pfizer clearly hopes it will someday be leading the way to future dramatic improvements for all cancer patients, including a better chance of beating the disease.
