FDA Recommendations Bode Well For Pfizer

| About: Pfizer Inc. (PFE)

Pfizer (NYSE:PFE) is still transitioning itself after its best selling drug Lipitor went off patent in 2011. Also starting in July a marketing partnership between Amgen and Pfizer ends which will result in a large loss of revenue from the blockbuster medication Enbrel. Three recent FDA committee recommendations all went in Pfizer's favor, in time these will help offset Enbrel and Lipitor's lost revenue.

Taliglucerase alfa

On May 1st the FDA approved Taliglucerase alfa for the treatment of type 1 Gaucher disease. Gaucher disease is an extremely rare disease, with less than 10,000 patients worldwide and less than 1500 in the United States. Its treatment is also extraordinarily expensive, costing up to $200,000 per year. With Taliglucerase alfa, Pfizer is aiming directly at Sanofi (NYSE:SNY) and their medication Imiglucerase. Sanofi inherited Imiglucerase in their recent acquisition of Genzyme. Even with severe production limitations Imiglucerase had over $550 million in sales in 2011. Taliglucerase was shown to be quite effective in managing Gaucher's disease, so efficacy should not be a problem. Pfizer and their partner Protalix (NYSEMKT:PLX) are also promising better availability and cheaper pricing so they should be able to steal considerable market share from Sanofi.

Tanezumab

Of the three drugs here, Tanezumab is the farthest from reaching the market. Tanezumab is a monoclonal antibody that decreases pain by inhibiting NGF. This new class of medications is extremely important because of the limited options for treating pain. Opiates and NSAIDs both have their own serious side effects, and their efficacy can be limited. Pfizer has had a number of trials cancelled due to fears of rapidly progressing osteoarthritis. In March an FDA panel unanimously voted to allow Pfizer to continue studying Tanezumab for the treatment of Osteoarthritis. Previous study results were impressive, with one third of patients taking Tanezumab reporting no to minimal pain, which was significantly higher than both placebo and an active comparator.

When the data from previous studies was broken down it showed that patients taking both Tanezumab and an NSAID together had significantly higher rates of joint replacement. Tanezumab alone did not have significant increases of joint replacements compared to placebo or an active comparator. The panel decided that despite this Tanezumab was worth the risk because of its excellent pain control and potential to progress the treatment of chronic pain. While facing huge safety hurdles analysts have predicted this new class of medications could be worth up to $11 billion a year in sales.

Tofacitinib

Another advisory committee recommendation, Tofacitinib has not been approved yet but the FDA usually follows their committee recommendations. Look for an actual approval in late August or September. Tofacitinib is a novel medication for the treatment of Rheumatoid Arthritis. As the first JAK inhibitor on the market Tofacitinib will compete with a number of TNF inhibitors on the market, including Enbrel from Amgen (NASDAQ:AMGN), Remicade from Johnson & Johnson (NYSE:JNJ), and Humira from Abbott Labs (NYSE:ABT). Tofacitinib has extremely good efficacy.

In the ORAL Standard trial Tofacitinib compared extremely well to Humira in controlling patients RA symptoms. The ORAL Step trial compared Tofacitinib to placebo in patients with RA that failed treatment with TNF inhibitors. In this study Tofacitinib proved to be statistically superior to placebo.

Two main issues could drag down sales of Tofacitinib. First, eventually there will be a number of competitors on the market, currently Rigel (NASDAQ:RIGL), Incyte (NASDAQ:INCY) and Vertex (NASDAQ:VRTX) have their own oral JAK inhibitors under development. Second is Tofacitinib's side effect profile. The FDA panel took into consideration the drugs side effects which include increased lipid levels, infection, and lymphoma. Look for Tofacitinib to be used conservatively at first due to its questionable side effects. If post-marketing studies show similar safety profiles to the TNF inhibitors, Tofacitinib sales could really take off. Also because of Tofacitinib's mechanism of action approvals for Crohn's disease, IBS, and psoriasis could be in its future.

Disclosure: I am long PFE.