Pfizer's Road To Leadership In Oncology

| About: Pfizer Inc. (PFE)

Summary

Pfizer's Ibrance is headed towards blockbuster status.

Purchasing right to Avelumab from Merck will help jump start its immuno-oncology efforts.

Pfizer's pipeline in immuno-oncology is strong and well diversified.

Background

Pfizer (NYSE:PFE) is attempting to become a leader in the oncology space. Mostly known as the drug company that makes Viagra and Lipitor, they are trying to expand into new clinical areas. An aging population and high reimbursement rates have them looking to expand their presence in oncology. Pfizer is accomplishing this through aggressive partnerships and their own research and development. In the past 5 years oncology related revenue has increased from just over a billion in 2010 to over 2.5 billion in 2015. Oncology related revenues grew by 61% in the fourth quarter of 2015. Look for this growth to continue as Pfizer is investing heavily in its pipeline and continued research and clinical trials of already approved medications. Below I will go through and summarize Pfizer's current and upcoming oncology medications.

Medications already on the market

Inlyta (Axitinib)

-Used for advanced renal cell cancer

-Sales were 430 million for 2015 with modest growth of 5%

Sutent (SUNItinib)

-1.1 billion in sales in 2015

-Used for renal cell cancer(kidney) , gastrointestinal stromal tumors, and pancreatic neuroendocrine tumors

-Has been on the market for a while, good recognition with oncologists

Xalkori (crizotinib)

- In March of 2016, the FDA approved Xalkori for the treatment of patients with metastatic non-small cell lung cancer (NSCLC) whose tumors are ROS1- positive

-In November 2015, Pfizer announced positive data from its study PROFILE 1029

-Under a recent agreement it will be co-promoted with Merck, with 80% of the profits going to Pfizer

-Total sales for 2015 were just under 500 million with growth of 11 percent compared to 2014

Ibrance (palbociclib)

-launched in February of 2015 for advanced breast cancer

-The PALOMA-3 trial, which studied Ibrance in women with hormone receptor positive advanced breast cancer showed patients taking Ibrance and fulvestrant had progression-free survival of 9.2 months versus placebo and fulvestrant which had a progression free survival of only 3.8 months. These excellent results have led the FDA to grant Ibrance priority review, look for a decision by the FDA in the next few months

-Ibrance should be approved in Europe sometime this year

-The PALOMA-2 trial which studied Ibrance in first line advanced breast cancer combo with letrozole data possible later this year

-723 million in sales for 2015, trending up nicely with 315 million in the last quarter alone

-Three studies in early breast cancer ongoing, PENELOPE-B, PALLAS and PALLET

-Will face serious competition from Eli Lilly's abemaciclib and Novartis' ribociclib

-Besides breast cancer palbociclib is also being investigated for mantle cell lymphoma, pancreatic, and head and neck cancer

-Will easily eclipse one billion in sales for 2016, and new indications should accelerate this growth

Medications in the Pipeline

Avelumab

-Closest to launch in the Pfizer oncology pipeline

-Avelumab is thought to work by binding to PD-L1 on tumor cells. Normally tumor cells use PD-L1 to bind to T cells and deactivate them. Avelumab stops this from happening allowing the T cells to fight the tumor

-Works similar to Opdivo (Nivolumab) which Bristol Myers (NYSE:BMY) thinks could reach 8 billion in sales by 2020, however avelumab is an anti PD-L1 while nivolumab is an anti PD-1 which is located on the T-cell. It is believed that anti PD-L1 which is located on the tumor cell could have fewer side effects which would give avelumab an advantage over nivolumab

-Other competitors include pembrolizumab (Merck), atezolizumab (Roche), and durvalumab (MedImmune)

-Avelumab is currently being studied for a variety of cancers. The clinical trials right now are progressing with Phase I studies for bladder cancer, gastric cancer, head & neck cancer, mesothelioma, ovarian cancer and renal cancer. A phase II study for Merkel Cell Carcinoma and a phase III study for NSCLC are also under way.

-Granted breakthrough therapy by the FDA for the treatment of Merkel Cell Carcinoma

-Pfizer partnered with Merck, paid 850 million upfront and gave up some rights to Xalkori for the opportunity to co-promote Avelumab

Inotuzumab

-Inotuzumab is a monoclonal antibody that targets the CD22 antigen, it is linked to a Calicheamicin which is cytotoxic

-Expect Pfizer to file for approval for acute lymphoblastic leukemia in 2016, granted breakthrough therapy by the FDA

-Preliminary results released in 2015 showed the endpoint of complete remission with incomplete hematologic recovery was achieved by 80% or patients receiving inotuzumab vs. 33% of patients receiving standard of care. The study is still on going to measure overall survival, expect final results in late 2016 or early 2017

-Phase three study for NHL halted due to not being able to meet primary endpoint

-Most likely will have narrow therapeutic use

4-1BB (PF-05082566)

-4-1BB is a protein receptor found on CD8+ T cells, natural killer cells, and CD4+ T cells. Pfizer's 4-1BB acts as an agonist on these receptors and causes the proliferation of these cells which then go on to attack tumor cells

-Pfizer's Phase I study involving 4-1BB for advanced lymphoma showed a reduction in cancer with 40 percent of patients with follicular lymphoma and 29 percent of patients with mantle cell lymphoma had a reduction in cancer, no serious side effects were reported and all patients completed the trial

-Development of this class of medications was originally abandoned in 2008 after showing liver damage but recent research in optimizing dosing has led to a resurgence in the development of 4-1BB medications

-Bristol-Myers Squibb, Johnson & Johnson (NYSE:JNJ), and AbbVie (NYSE:ABBV) are all investigating their own 4-1BB medications, currently BMS with urelumab is the only other 4-1BB in clinical trials

-BMS' product is an IgG4 versus Pfizer's product which is an lgG2, this difference could lead to different side effect profiles

-Currently involved in numerous studies including non-small cell lung cancer, lymphoma, head and neck cancer, and in melanoma

-Most current trials involving 4-1BB are in combination with other medications including Keytruda, Rituxan, mogamulizumab, and Avelumab.

OX40

-OX40 agonists work by providing a "go" signal to the body which causes an increase in production of killer CD8 and helper CD4 T cells

-Will be used in synergy with other medications (4-1BB, PD-1, CTLA-4)

-Other companies with OX40 medications in their pipeline include Genentech and AstraZeneca

-Currently in Phase I dose escalation trials, look for combination trials to start soon

Final Thoughts

The immuno-oncology market is foretasted by Citi to generate up to 35 billion a year within 10 years. While there are a multitude of companies going after this huge market Pfizer is well positioned with a variety of promising drugs. Pfizer believes they can be a leader in this method of treatment, they paid almost a billion dollars to get their hands on avelumab and have invested heavily in their own pipeline. I think the main reason Pfizer was willing to pay so much to gain access to avelumab is that many clinicians feel that combining immuno-oncology medications together to augment each other will be the best way to treat cancer and turn it into a more manageable disease. You can see this with a lot of Pfizer's early stage trials involving combinations of Avelumab, 4-1BB and OX40. Future cancer regimens could call for a PD-1, 4-1BB, and OX40 and Pfizer is the only drug company that has a drug from each class of these medications. This will give Pfizer efficiency advantages in everything from physician education to clinical trials. While immuno oncology is just in its infancy the success of Opdivo and Keytruda shows just how much potential these new oncology agents have and Pfizer has put itself in a great position to capture a significant portion of this market.

Disclosure: I am/we are long PFE.

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.