A Look At Pfizer's Pipeline For Candidates To Replace Lipitor's Lost Revenue

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 |  About: Pfizer Inc. (PFE), Includes: BMY
by: Jon Crowley

As generic company’s line up to start producing Pfizer’s (NYSE:PFE) hit cholesterol medication Lipitor, Pfizer’s investors are anxiously waiting the approval of new drugs to replace lost revenue and profit. In 2010, Lipitor produced 10.7 billion dollars in revenue for Pfizer, by far its best selling drug. A look at drugs in the same class that also went generic can give you an idea of the amount of sales Pfizer stands to lose.

Drug

Manufacturer

Sales year before patent expiration

Sales two years after patent expiration

% Decrease

Simvastatin (Zocor)

Merck

~4.3 Billion

~660 million

~85%

Pravastatin (Pravachol)

Bristol-Myers Squibb

~2.2 Billion

~203 million

~90%

Atorvastatin (Lipitor)

Pfizer

~10.7 Billion

~1.3 Billion *

~87%*

Click to enlarge

* Estimated by averaging Zocor and Pravachol decreases

So if Lipitor follows a similar pattern as its chemical cousins two years from now Pfizer will have around 9.5 Billion in revenue to replace. You don’t replace the best selling drug of all time with one medication, so let’s take a look at a few of the drugs that could help Pfizer replace this lost revenue.

Pfizer currently has 11 medications in the registration phase and 22 medications in Phase 3 trials. Many of these medications are already available on the market and are in the process of being approved for new disease states. I will be focusing on new medications that have the most financial potential.

Apixaban (Phase 3)

Apixaban is Pfizer’s anticoagulation medication developed in partnership with Bristol-Myers Squibb (NYSE:BMY). It is going to be one of three medications that will be vying for the possible 10 billion dollar a year market of replacing Coumadin.

Positives

  • As previously stated the anticoagulation market has huge potential
  • Does not have to be monitored extensively like Coumadin
  • ARISTOTLE trial showed Apixaban to reduce mortality by 11% when compared with Coumadin with less bleeding risks in treating patients with atrial fibrillation
  • A main competitor Xarelto (Johnson and Johnson) was rejected for treating patients with atrial fibrillation
  • Limited interactions with food and other medications when compared to Coumadin

Negatives

  • Already beaten to the market by Pradaxa (Boehringer Ingelheim)
  • Must be dosed twice daily and adjusted for renal function
  • Was not to superior to Lovonox in preventing thromboembolisms in patients discharged from the hospital
  • More costly than Warfarin, although does not require extensive monitoring

Tofacitinib (Phase 3)

Tofacitinib is a novel JAK3 inhibitor which is intended to treat a variety of immunological diseases including RA, inflammatory bowel disease, and psoriasis.

Positives

  • Taken orally while many of its competitors are injected
  • Will be the first oral JAK3 inhibitor on the market
  • Significantly improved ACR20 rates when compared with placebo in patients with RA that had not responded to conventional treatment
  • Will be cheaper than many of the biologic agents on the market

Negatives

  • Could possibly take sales away from Enbrel, which is also made by Pfizer and contributed more than 3 billion in revenue for 2010.
  • A competing JAK3 inhibitor being developed by Incyte is taken once daily compared with twice daily for tofacitinib
  • Side effects include increased cholesterol levels, infection, and decreased neutrophil count
  • In one study 4 patients died due to heart failure, however if these deaths were a direct result of taking tofacitinib is still up for debate

Bapineuzumab (Phase 3)

Bapineuzumab is a drug that Pfizer took over when they bought Wyeth. It was developed for the treatment of Alzheimer’s disease. Alzheimer’s disease while effecting millions of people, has limited treatment options so a new drug for clinicians to use would be very welcome.

Positives

Negatives

  • The highest dose was shown to cause inflammation in the brain, patients in this arm of the study were removed from this dosage
  • Trials have been limited in patient size so far
  • Drug is given as an injection
  • Alzheimer’s disease is not well understood and it is not certain that decreasing amyloid plaque size will lead to improved clinical outcomes

Tanezumab (Phase 3)

Tanezumab is a monoclonal antibody that was developed for the treatment of chronic pain. Currently treating long-term pain is limited to mostly NSAID’s and opioids, each of which has serious side effects. Most new drug releases have focused on these two classes of medications as well. If side effect issues can be resolved tanezumab has the potential to change the way chronic pain is treated.

Positives

Negatives

  • Monoclonal antibodies are extremely expensive and could present a barrier to entry with some patients
  • Shown to increase the rate of progression of osteoarthritis, however it might be due to such decreased pain levels that patients led to active of life styles
  • Given as an injection
  • A number of trials were discontinued due to concerns about the accelerated osteoarthritis progression

Crizotinib (Recently approved)

A novel approach at treating nonsmall-cell lung cancer, Crizotinib was recently approved to treat a small subtype of patients that are ALK positive. This drug is very important to Pfizer because it represents their continued progress on treating gene specific cancers.

Positives

Negatives

  • Currently approved for a very small patient population.

Disclosure: I am long PFE.