Seeking Alpha
Profile| Send Message|
( followers)  

Success in a second pivotal study with tofacitinib, a novel pill to treat rheumatoid arthritis, is great news for Pfizer (NYSE:PFE). The drug is by far the most valuable product in the pharma giant’s pipeline and represents a rare home-grown compound for the company (Pfizer highlights rare organic candidate amid M&A driven growth strategy, November 23, 2010).

The data released last week also bolsters excitement around this class, Jak kinase inhibitors, which many believe hold the potential to radically change the treatment of RA, providing the first really effective oral medications. Tofacitinib is the most advanced candidate and data from three more Phase III studies has yet to appear, but analysts are already pencilling in billion dollar sales forecasts.

Rising hopes

Consensus for sales of tofacitinib – until recently called tasocitinib - in 2016 already sits at $1.12bn, according to EvaluatePharma. That figure has been edging higher over the last 12 months, archived forecasts reveal. The first set of Phase III data released last November provided a big boost to confidence in the product.

In that first study the drug significantly reduced symptoms and improved physical function in RA patients, compared to placebo, meeting two primary endpoints of the study. The third primary endpoint, disease remission at three months, was missed, but a numerical trend in favour of the drug was seen.

Importantly, the data showed the pill’s efficacy to be similar to widely used injectable therapies available such as Humira, Enbrel and Remicade.

In the study reporting today, in patients who had failed previous therapies, the drug again met primary endpoint measures of reducing the signs and symptoms of RA and improving physical function.

Validating

Full data has yet to be revealed but these two positive late stage studies help validate these drugs’ mechanism of action in this disease (Therapeutic focus - Pfizer data highlights potential of JAKs in arthritis, November 11, 2010).

Jak kinase inhibitors work differently to the agents currently used to treat RA, which work outside of cells. Janus kinases (Jak) are intracellular protein kinases that play a critical role in a pathway by which extracellular signals, such as cytokines and growth factors, stimulate a cellular response. Atypical JAK signalling is implicated in conditions such as myeloproliferative disorders, haematological cancers, inflammation and autoimmunity.

Jak-dependent cytokines have been implicated in a number of inflammatory and autoimmune diseases like RA, suggesting that Jak inhibitors like tofacitinib might be effective in alleviating the disease.

Crucial progress

However, further data is still needed, particularly longer term safety data. They also have to stack up to current therapies, and one study that will be watched particularly closely compares tofacitinib to Abbott Laboratories’ mega-blockbuster Humira. That trial could yield results in the middle of the year.

And of course it is not only Pfizer working on this area. Eli Lilly (NYSE:LLY) has a candidate licensed from Incyte, LY3009104, and Vertex Pharmaceuticals (NASDAQ:VRTX) has VX-509, both in mid-stage trials. Meanwhile drugs with similar mechanisms of action are also making progress - AstraZeneca (NYSE:AZN) last year started a Phase III programme with a drug that works on a similar principle, R788 or fostamatinib, an oral Syk inhibitor licensed from Rigel Pharmaceuticals (NASDAQ:RIGL).

So if tofacitinib continues to make progress, hopes will build for all of these candidates.

And Pfizer needs this progress just as badly. As UBS analysts commented today in response to the data: "This is the key product in the late stage pipeline, and it needs to be successful for [Pfizer] to continue to work as a stock this year." Shares in the company have climbed 13% so far this year, and are currently trading at $19.73, two-and-half-year highs. Growing hopes for tofacitinib has a lot to do with the rally in the last few months.

This year is crucial for Pfizer’s biggest pipeline hope. Expectations are high and need to be met.

Source: Pfizer Needs Rheumatoid Arthritis Drug to Keep Performing