John Carroll / Endpoints News
Some new products like Ibrance are gaining ground in the marketplace, helping Pfizer weather the storm of generic competition. But sales declined in Q2 as Prevnar revenue weakened and competition loomed for Viagra and Lyrica. And that will have analysts looking to see what CEO Ian Read will do next to right the course at the pharma giant; whether that’s big deals, new cost-cutting efforts, a company breakup, or a mix of all of the above.
Pfizer is already one of the top R&D spenders in the business, and this year expects to spend upwards of $8 billion on new drug development. In its Q2 release out Tuesday morning, the company boasted of 25 to 30 potential approvals over the next 5 years, including 15 “possible blockbusters” — with half of those up for an approval by 2020.
“Our strategy remains focused on maximizing in-market opportunities while continuing to advance the pipeline and managing our cost structure to deliver attractive financial performance over time,” said Read in a statement.
Ian Read, Pfizer CEO
Exhibit A in Read’s case today is the cancer pipeline, topped by talazoparib, a PARP inhibitor it acquired in the big $14 billion Medivation buyout. It’s moving forward on doubles and triple combos with Bavencio (avelumab), including a tie-up with chemotherapy, as it looks to expand its checkpoint presence. Like Pfizer’s PD-L1 drug, though, Pfizer will be steering into a market that is already well populated with rival drugs. And analysts see little chance that at a time payers are getting increasingly tough on high prices for branded drugs Pfizer will be able to rely on its pipeline to get the top line growing again anytime soon, even as it comes on strong in biosimilars — with 8 in mid- to late-development.
That leaves dealmaking as the shortest path to growth, and after being frustrated in its attempts to buy AstraZeneca as well as Allergan, anything could happen on this front. Read has put the BD team on hold for now, in part because he wants to see how tax reform could allow for the repatriation of overseas cash, influencing the valuations on new products. And that didn’t change today.
“We look at BD as a way of improving returns for shareholders,” Read told analysts. “There are short term events in the marketplace such as tax reform that may change asset values. Any focus on BD is somewhat delayed by resolution of that.”
Delayed but by no means finished, as Read made clear as several analysts like Jami Rubin pressed him for some clarity on what the company plans next.
Pfizer’s pause, in turn, could hold back players like Novartis from making a bid to buy AstraZeneca, notes a report from Reuters.
AstraZeneca was weakened badly last week with the initial setback in MYSTIC last week.
“Pfizer has taken a break on M&A for now and no-one expects them to make another move for AstraZeneca. But M&A is like a game of chess and nobody will go after AstraZeneca until Pfizer picks its next target,” one banker told Reuters.
That next target is foremost on analysts’ minds.
Astellas conceded last week that it is stopping a Phase III program for Xtandi – partnered with Pfizer – as a treatment for breast cancer. That was the biggest move in terms of cleaning up the pipeline this past quarter at Pfizer. The pharma giant also dropped a slate of 4 Phase I studies, including a stem cell therapy for age-related macular degeneration. You can see them all at the end of its pipeline review slide show.
Russian pharmaceutical company NovaMedica, a portfolio company of RUSNANO, announces the start of construction of a plant for the production of sterile injectable drugs as part of its long-term strategy to localize innovative medicines and technologies of their development and production in Russia. The plant will be built in the industrial park “Vorsino” in the Kaluga region.
20 September 2017
19 September 2017