Pfizer's Stock Price Is Scheduled To Pop

| About: Pfizer Inc. (PFE)

Summary

In the last 12-months, Ibrance has been one of Pfizer's key growth area.

And on February 19, 2016, Pfizer received expanded FDA approval for Ibrance.

The news will accelerate revenue growth, open-up new markets and bolster investor confidence in the stock.

Introduction

On the 3rd of February of 2015, the Food and Drug Administration ("FDA") granted the "accelerated approval to Ibrance (palbociclib) to treat advanced (metastatic) breast cancer."

The FDA decided to grant Ibrance breakthrough therapy designation, "because the sponsor (Pfizer) demonstrated through preliminary clinical evidence that the drug may offer a substantial improvement over available therapies."

Why Ibrance is Essential?

Breast cancer is one of the most fatal diseases in the U.S. According to the nonprofit Breastcancer.org, about 1 in 8 U.S. women (about 12%) will develop invasive breast cancer over the course of her lifetime.

This is why Pfizer's (NYSE:PFE) Ibrance is critical. It is essential in treating one of the most life-threatening diseases in the world. In 2015, ~231,840 new cases of invasive breast cancer are estimated to have been diagnosed in women in the U.S., with ~40,290 deaths.

Fast forward those numbers to 2016, estimates suggest 14,820 new cases or ~6.4% increase from 2015 with ~0.4% rise in breast cancer deaths this year. According to the Susan G. Komen - one of the world's largest non-profits that source funding for breast cancer with $2.6 billion invested in groundbreaking research - estimates that among U.S. women there will be 246,660 new cases of invasive breast cancer with 40,450 deaths.

Ibrance is an important milestone in the fight against breast cancer. Initial trials had shown that participants who were given Ibrance together with letrozole lived for 20.2 months without the disease progressing compared to 10.2 months seen in participants receiving only letrozole.

Ibrance's Significance to Pfizer & its shareholders

Ibrance has been a great revenue growth driver for Pfizer despite being in its early life cycle.

"Frank will speak to our 2016 guidance in a moment. We expect to deliver operational revenue growth in 2016. Our key growth drivers will continue to be Ibrance, Eliquis, and Xeljanz." - Ian Read, CEO & Chairman of Pfizer, during the company's Q4 2015 Earnings Call Results.

"Global oncology revenues grew 61% operationally driven by Ibrance in the U.S. and to a lesser extent by Sutent and Xalkori globally. And consumer healthcare revenues grew 4% operationally due to Nexium 24HR in the U.S." Frank D'Amelio Pfizer's CFO, during the company's Q4 2015 Earnings Call Results.

But this revenue growth driver has been made even more lucrative. On February 19, 2016, Pfizer received an expanded FDA approval for Ibrance (palbociclib) in a broader range of women.

"Pfizer Receives Expanded FDA Approval For IBRANCE (palbociclib) In HR+, HER2- Metastatic Breast Cancer

  • First-in-class Therapy Now Approved for Use in a Broader Range of Women
  • New Indication Supported by Results of Phase 3 PALOMA-3 Trial of IBRANCE in Combination with Fulvestrant

...Today's news gives more women with metastatic breast cancer the opportunity to benefit from this first-in-class medicine...Pfizer Inc. (NYSE:) today announced that the U.S. Food and Drug Administration (FDA) has approved a new indication expanding the use of IBRANCE® (palbociclib) 125mg capsules, Pfizer's metastatic breast cancer therapy." - Pfizer News.

We believe this is the news that is going to make the stock surge higher this coming week. This is because Ibrance has already been a success. Therefore, broadening the target clientele base increases the chances of revenue growth this fiscal year and beyond.

In addition, this may also imply that Ibrance is the best in its class. Pfizer's supplemental new drug for Ibrance was approved under the FDA's Breakthrough Therapy designation and Priority Review programs. According to the FDA report on "Expedited Programs for Serious Conditions - Drugs and Biologics," these programs are only designated to drugs that "demonstrate substantial improvement over existing therapies on 1 or more clinically significant endpoints."

Furthermore, Ibrance has had very good clinical experience. For instance, Pfizer reports that "Ibrance has been prescribed by 5,000 physicians in more than 20,000 patients. And so far the feedback is very positive, particularly on patients' quality of life."

Lastly, this sets precedence for a positive outcome in Europe as well. We believe that access to the European market will greatly contribute in making Ibrance (palbociclib) one of Pfizer's most valuable drugs. Speaking on Ibrance's competition, Albert Bourla said that Pfizer was the only "company with a registered product in the U.S., and six other countries, and an accepted filing in Europe, where we (they Pfizer) may obtain registration as early as next year (FY2016)."

We believe that this announcement is critical to opening-up the European market, bolster investor confidence in the stock and lead to margin expansions for Pfizer.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.