Pfizer Gets Setback on New Cholesterol Drug

| About: Pfizer Inc. (PFE)
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I guess it’s clearer now why Pfizer (NYSE:PFE) recently chose to provide guidance that torcetrapib – Pfizer’s best hope for replacing Lipitor sales when Lipitor goes off patent and loses its pediatric exclusivity in late March 2010 – will likely face higher regulatory hurdles than they had earlier let on. Pfizer on Oct 31st (see Therapeutics Daily) announced that results of a Phase 3 clinical trial demonstrated increases of 3 to 4 mm Hg systolic BP.

Pfizer had previously indicated that the FDA would finish its review of the pivotal intravascular ultrasonography [IVUS] trial, in which Pfizer hopes to demonstrate plaque diameter reduction with the drug, by end 2008. It warned, though, that a clinical outcomes study could be required before FDA approval. Such a study is underway, but results won’t be available until 2010 at the earliest.

Does this blood pressure finding, 1-2 mm higher than what was seen in Phase 2, really change the outlook for approval? Yes and no. I think what it does is cement the need for an outcomes study pre-approval, but I also think this was likely to be required anyway, and Pfizer was simply being overly optimistic to the public after Phase 2. Perhaps the recent change of management at Pfizer has caused them to take a more realistic public stance, or maybe they were just waiting to see the BP results from Phase 3 before urging caution, but I’m just speculating.

Assuming the drug actually does improve cardiac morbidity/mortality, Pfizer investors might actually be better off taking a hit from an approval delay. I say this, because I think the drug’s sales are going to suffer mightily without an outcomes trial. Again, I’m speculating, but I make this point because the stock’s value pre-launch reflects technical/regulatory uncertainties as well as sales expectations of torcetrapib, whereas the post-launch value is going to reflect sales expectations primarily.

Look for Pfizer to downplay the relative importance of torcetrapib to Pfizer’s long-term growth prospects, as would be wise.

Finally, I wouldn’t try to transfer the experience of torcetrapib to therpies aimed at increasing HDL-C through mechanisms other than CETP inhibition. The only relevant lesson is that sponsors must expect and plan for an outcomes study pre-approval for virtually any chronic-use cardiovascular drug with a new mechanism of action. Plaque reduction studies are nice but aren’t going to cut it for most new drugs.