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Pfizer is betting big on cancer drugs after Covid decline

Pfizer is betting big on cancer drugs after Covid decline

Nurphoto | Nurphoto | Getty Images

Pfizer is ready to move on from Covid. 

Now, the company is betting on cancer drugs to help it regain its footing after a rocky year marked by the rapid decline of its Covid business. It just might take a while before that bet pays off. 

Pfizer pitched its deeper push into oncology during a four-hour investor event last week. And it had a splashy 60-second Super Bowl ad that touted its initiative to “outdo cancer.” 

The shift comes at a crucial time for Pfizer. The pharmaceutical giant has been trying to shore up investor sentiment after its shares fell more than 40% in 2023. That share drop erased more than $100 billion in Pfizer’s market value.

Along with plummeting demand for its Covid products, Pfizer disappointed Wall Street last year with the underwhelming launch of a new RSV shot, a twice-daily weight loss pill that fell short in clinical trials and a 2024 forecast that missed expectations. The company has launched a $4 billion cost-cutting program, laying off hundreds of employees and shaving down its research and development spending. 

During the investor day, Pfizer laid out its priorities now that it has fully integrated with the targeted cancer drugmaker Seagen. That $43 billion Seagen acquisition doubled Pfizer’s oncology drug pipeline to 60 different experimental programs. 

With Seagen under its belt, Pfizer says its drug pipeline could produce at least eight blockbuster medicines by 2030, up from just five today. But the company did not disclose which drugs it believes could offer that potential. 

Some analysts noted that it might take a few years for some of Pfizer’s cancer drugs in mid-stage development to show pivotal clinical trial data and become less risky. 

Pfizer’s existing oncology portfolio is also facing some competitive pressure. Revenue from the blockbuster breast cancer drug Ibrance and prostate cancer treatment Xtandi, which Pfizer shares with Astellas Pharma, has declined over the past year. Both drugs are expected to lose market exclusivity in 2027. 

Still, some analysts came out of the investor day feeling encouraged. 

“The company is facing a number of challenges, but we believe the event was a success in laying out a path for the oncology business to help offset upcoming patent losses, and drive growth in the future,” Guggenheim analysts wrote in a note Tuesday. 

Long-term commercial strategy

Pfizer used the investor event to formally introduce its new business division dedicated to cancer research and to lay out a long-term strategy for it through the end of the decade.

That oncology unit hosts a sprawling portfolio of experimental medicines that Pfizer and Seagen discovered or acquired through deals, as well as the treatments both companies have long been selling. 

The unit is led by Chris Boshoff, a longtime Pfizer executive who most recently served as the company’s head of cancer research and development. 

“As a newly combined organization, our expertise and collective capabilities are now amplified to deliver even more impact for patients than each company could do by itself,” Boshoff said last week to kick off the event.  

Boshoff highlighted the scale of Pfizer’s capabilities, noting it has 10 manufacturing sites producing cancer drugs on three continents, while Seagen had just one. He also pointed to Pfizer’s commercial presence in more than 100 countries and a customer-facing commercial team that is triple the size of Seagen’s. 

Pfizer did not provide a specific sales projection for its oncology franchise by 2030. But the company said it expects roughly two-thirds of risk-adjusted oncology revenue to come from new drugs and new indications — or treatment uses — for existing products by the end of the decade.

Signage outside Seagen headquarters in Bothell, Washington, on Tuesday, March 14, 2023.

David Ryder | Bloomberg | Getty Images

Pfizer reiterated its expectation that the Seagen acquisition will bring in $10 billion in sales by 2030. 

But the company provided little guidance on what Seagen’s growth will look like until the end of the decade, UBS analyst Trung Huynh said in a note Thursday. 

A new focus 

Pfizer also highlighted a huge shift in its drug pipeline strategy. 

Boshoff said the oncology division plans to shift to biologic drugs as its main source of revenue, increasing the proportion of those treatments in its pipeline from 6% to 65% by 2030.

Biologics are treatments derived from living sources such as animals or humans, including vaccines, stem cell treatments and gene therapies. They are among the most expensive prescription drugs in the U.S.

Before the Seagen deal, 94% of Pfizer’s cancer products were small-molecule drugs. Those medicines are made of chemicals and have low molecular weights. 

Boshoff said biologics represent “a more durable revenue potential” based on several factors. That includes upcoming patent expirations and potential pressure from President Joe Biden’s Inflation Reduction Act. 

A provision of that law allows Medicare to start negotiating the prices of biologics as early as 13 years after they receive Food and Drug Administration approval, compared with just nine years for small-molecule drugs. The pharmaceutical industry has argued that would deter drugmakers from investing in small molecules.

Pfizer’s decision to rely more on biologics may also offer “better protection” against competition from cheaper copycats, Guggenheim analysts said in their note. Those copycats, or biosimilars, have historically had trouble gaining market share from biologic treatments. That’s unlike with drugs called generics, which are exact copies of small-molecule treatments. 

Small molecules will remain one of three core drug types of Pfizer’s oncology division. The other two are biologics, namely bispecific antibodies, and antibody-drug conjugates, or ADCs. 

Pfizer’s three core oncology drug types

  • Small-molecule drugs: Treatments with a low molecular weight made up of chemicals created in a lab. 
  • Bispecific antibodies: Treatments that can bind to two different antigens — or any substance that causes the body to have an immune response — at the same time. Those drugs are biologics because they are developed from living sources that produce antibodies.
  • Antibody-drug conjugates: Medications that deliver a cancer-killing therapy to specifically target and kill cancer cells and minimize damage to healthy ones. The treatments represent a hybrid between biologics and small-molecule drugs, but the FDA classifies ADCs as biologics.

Notably, the company is developing a “next-generation” platform for ADCs that combines Pfizer’s protein engineering and antibody design capabilities with Seagen’s ADC technology. Together, the companies have 12 ADCs in development, six of which are in early clinical trials or studies on animals.

JPMorgan analyst Chris Schott wrote in a note last week that the firm walked away from the investor event encouraged by the breadth of Pfizer’s mid-stage oncology pipeline. But he noted that it will take time before a number of the treatments show “pivotal data.”

Four core cancer types

Pfizer plans to focus on four main types of cancer: breast cancer; genitourinary cancer, which impacts urinary and genital organs or functions; thoracic cancer, such as lung, head and neck cancer; and hematology-oncology, or cancers of the blood, such as multiple myeloma and lymphomas. 

Pfizer expects breast cancer’s contribution to total oncology sales to drop to about 10% by 2030 from roughly 40% last year, the company’s oncology commercial chief Suneet Varma said during the event. 

That decline accounts for the upcoming loss of exclusivity of top-seller Ibrance, which raked in $4.75 billion in sales in 2023. 

But the company said it has a handful of breast cancer drugs in development that could become “potential growth drivers” as Ibrance sales fall. That includes a certain type of treatment called atirmociclib that could potentially be more effective and easier for patients to tolerate. 

Pfizer is testing the medicine as a second-line treatment for a certain type of breast cancer in a phase three trial. A second-line therapy is given when an initial treatment doesn’t work or stops working. 

The company also plans to start a separate late-stage trial on atirmociclib as a first treatment for the same condition in the second half of the year.

Pfizer expects genitourinary cancer to make up an estimated 35% of oncology sales by 2030, which would make it the largest franchise of the cancer business. That’s up from 20% in 2023. 

Pfizer is testing an experimental ADC called disitamab vedotin — which Seagen licensed from Chinese firm RemeGe — as a treatment for certain bladder cancers, with data from mid-stage and late-stage trials expected in 2025 and 2026.

Notably, RemeGe already sells that drug in China. Pfizer is also examining the medicine’s potential to treat breast cancer and other tumor types.

Meanwhile, Padcev, an ADC Pfizer shares with Astellas Pharma, in combination with Merck‘s immunotherapy Keytruda is becoming a new first-line standard of care for bladder cancer. Pfizer executives last week said Padcev had “mega-blockbuster” potential, which the company defines as raking in annual sales of more than $3 billion. 

Pfizer’s key cancer drugs on the U.S. market

  • Ibrance: treatment for certain breast cancers.
  • Xtandi: treatment for four types of advanced prostate cancer.
  • Adcetris: treatment for certain lymphomas from Seagen.
  • Padcev: treatment for some types of advanced bladder cancer, either alone or in combination with Keytruda.
  • Elrexfio: treatment for certain adults with multiple myeloma.
  • Talzenna: treatment for some breast cancers.
  • Lorbrena: treatment for a type of non-small cell lung cancer.

Pfizer executives expect thoracic cancer to double its revenue contributions by 2030. 

Seagen brings an ADC called sigvotatug vedotin to this franchise. The drug recently entered a late-stage trial as a second-line treatment for a certain type of lung cancer, with data expected around 2026 to 2027. Pfizer also plans to test the ADC as a first-line treatment.

Guggenheim analysts said they expect the treatment to be one of Pfizer’s blockbuster oncology drugs by the end of the decade. Those analysts also expect a bispecific drug called Elrexfio, which falls under Pfizer’s hematology-oncology portfolio, to eventually become a top seller.

The hematology-oncology franchise is expected to account for 25% of the cancer unit’s sales by 2030, up from just 10% in 2023. 

The FDA has approved Elrexfio for patients with multiple myeloma who have tried at least four prior types of therapy. But Pfizer is conducting two late-stage clinical trials on Elrexfio as a second-line treatment, with data not expected until around 2025 and 2026. 

Drugs outside of cancer

Pfizer is splitting the rest of its business outside of oncology into two divisions: a U.S. commercial unit and an international commercial unit. Those divisions are focusing on vaccines, along with metabolic and inflammatory conditions. 

This fall, Pfizer plans to roll out another updated version of its Covid vaccine that will target a new strain of the virus. 

The company previously outlined plans to develop “next-generation” versions of its Covid shot, which aim to broaden and extend the protection people get to a full year. 

But Pfizer hasn’t decided whether to move forward with those plans because the company needs to be convinced that there is still an “eagerness to embrace Covid intervention,” Dr. Mikael Dolsten, the company’s chief scientific officer, told CNBC in an interview last week.

The new vaccine COMIRNATY® (Covid-19 vaccine, mRNA) by Pfizer, available at CVS Pharmacy in Eagle Rock, California.

Irfan Khan | Los Angeles Times | Getty Images

Dolsten pointed to two other “strong pillars” in the company’s vaccine portfolio: bacterial and viral shots. The company is testing a “fourth-generation” version of its vaccine to prevent pneumococcal disease, which is caused by a bacteria that can attack different parts of the body.

Pfizer is also working to expand the use of its shot against respiratory syncytial virus, commonly called RSV, to high-risk patients ages 18 to 59. It’s currently approved in the U.S. for expectant mothers and adults age 60 and above. 

The company is also testing combination vaccines targeting multiple respiratory viruses, including a shot for Covid and the flu in late-stage development.

Outside of vaccines, the company is developing an oral treatment for sickle cell disease called GBT601. Pfizer views that drug as a potentially more effective successor to its drug Oxbryta, which is already approved for the condition.

Pfizer also expects to release mid-stage trial data on its experimental treatment for cancer cachexia, or what Dolsten called “the opposite of obesity.” It refers to the loss of body weight and muscle mass, along with weakness that may occur in patients with cancer, AIDS or other chronic diseases.

Another area that’s top of mind for investors is obesity. Pfizer expects to release early-stage trial data on a once-daily version of its experimental weight loss pill, danuglipron, in the first half of the year. The company is also working on a second drug for obesity, but has not disclosed how it will work. 

Dolsten touted the potential of a weight-loss drug pill, which could help meet the soaring demand for obesity treatments. Much of the existing injectable drugs for the condition are in shortage in the U.S. He also noted that a pill would likely be priced differently than injections, which cost around $1,000 per month before insurance. 

“A pill would allow you also to have more access,” Dolsten said. “If you have 300 million patients per year, it will be one of the biggest medications ever.”

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