Transparency/Disclaimer: I was compensated modestly by public relations to write this article. While I have vetted each company, researched it thoroughly and I've done my own due diligence, my due diligence is not a substitute for your own.
Pfizer (PFE) seems to be having trouble getting its new rare disease drug approved by the FDA. As things stand, the health advisory panel that is addressing the issue has given a split vote on whether the drug, aimed at treating a rare neurodegenerative disease, should be approved.
The problem is the panel agrees that the drug does not meet the main goal of the study in treating the fatal condition in question. However, it also agrees that the drug treats a 'surrogate endpoint' that may correlate with the underlying treatment of the fatal disease that is the subject of the study. Basically, a decision needs to be made on whether the drug is in fact effectual at all for the treatment of the illness.
The only thing to do at present is to wait and see whether the FDA will give the drug approval. Pfizer does have other drugs waiting approval. Soon we will hear if the company's drug tafamidis will gain approval. However, this is a minor drug in comparison to the drug mentioned above in that it has not really made as a big a splash in the news.
However, because any new drug can have an effect on pharmaceutical stocks, let's talk about tafamidis in a little more detail. It is "a novel, investigational, oral therapy for the treatment of Transthyretin Familial Amyloid Polyneuropathy (TTR-FAP) in adult patients with symptomatic polyneuropathy to delay neurologic impairment". The advisory committee for this drug has already approved it for use in this disease.
If the drug is approved in the end, this will mean great things for Pfizer. However, earlier this week the drug was rejected by the advisory panel for not meeting the main aims of the study. As far as I am concerned, things could look better for Pfizer in this particular instance. It seems that the chance of having the drug approved is a slim one at best.
What I find most difficult to deal with in this situation is the uncertainty, and I guess that it's even worse for Pfizer itself. Once a final decision is reached, the company will be able to either celebrate or look into an alternative line of investigation either for this particular drug or for a brand new drug to be used in the future.
Pfizer, as well as Bristol Meyers Squibb (BMY), may well benefit from a setback experienced by competitor Johnson & Johnson (JNJ). Johnson & Johnson attempted to gain government advisory approval for its drug Xarelto. Essentially, the company wants to expand the use of the drug, which is basically a blood thinner. This is one of Johnson & Johnson's most influential and important drugs, so an expansion would make a significant difference to the company's place on the stocks. Despite the fact that the advisory board approved the drug for the prevention of heart attacks and strokes for people with a history of heart problems, the FDA did not give it final approval. This could be a major setback for Johnson & Johnson, but Pfizer is more than happy as it is developing a rival to the drug which could now be marketed without any competition to worry about.
Another stock to keep a close eye on is ChromaDex (CDXC.OB). I expect this stock to climb on positive news of its new dietary supplement line acheiving 50% higher sales than expected during the first quarter. ChromaDex supplies ingredients (phytochemicals) to the pharmaceutical industry. Investors should definately keep a close eye on this stock, as it has great potential.
Pfizer competitor Eli Lilly (LLY) has had a stroke of luck recently. A drug developed by Johnson & Johnson and Bayer called Xarelto that would have served as a major competitor to Eli Lilly's drug Effient, was recently denied approval by a board the advises the FDA. This is certainly good news for the company, although the FDA does not have to take the panels advice. We will have to wait for at least another month before we discover whether the FDA will approve the drug. For now, at least, Eli Lilly is safe.
GlaxoSmithKline (GSK) and AstraZeneca (AZN) have teamed up in an effort to address a very important problem that is facing the world at present: the fact that bugs can build up a resistance to antibiotics. The advent of "superbugs" is one that we are hearing about more and more. As yet, no definitive efforts have been made to address the problem. Should these two enormous pharmaceutical companies be successful in finding the solution to this growing problem that claims many lives each year, they will both become superpowers in the industry.
Sanofi Aventis (SNY) seems to have the right idea about how to move forward. The company is targeting cancer in its research, focusing on liver cancer in particular. Although this is not a big problem in the West, about 10% of the Chinese population is affected by liver cancer. This is one of the fastest growing emerging markets. So Sanofi has the right idea in two respects: it is tackling cancer, which is always a big topic, and it is getting hold of an emerging market that could benefit it greatly in the months and years to come.
Last but not least, Pfizer's competitor AstraZeneca is involved, on its own this time, in an attempt to make drugs safer for the liver. There are ways to identify the effects that a drug will have on the liver, but these are not very good and most times the real damage is only noticed after the drug has been on the market for a while. If AstraZeneca is successful in identifying a conclusive way to predict the effects that drugs will have on the liver, it will make a good name for itself in the drug industry and will emerge as a leader.
Pfizer's news hinges on the approval of its new drug. Of course, the company is used to these waiting periods, as its investors must be too. Investors will hope that Pfizer can get it out on the market and bring home the benefits to all involved.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.