‘What a difference a day
can make." It’s an adage borne out by recent
events concerning Pfizer’s highly anticipated
cholesterol drug, torcetrapib. At an investors’
meeting on November 30, Pfizer chief executive Jeffrey
Kindler expressed optimism for torcetrapib’s prospects
despite evidence that the drug can increase blood
pressure. The company said it hoped to file for FDA
approval of torcetrapib taken in combination with
Lipitor (atorvastatin, Pfizer) in the second half of
2007.
Two days later, Pfizer notified the FDA it was
halting clinical trials and the development program
overall for torcetrapib/Lipitor due to an increased rate
of mortality in patients receiving the combination
compared with those receiving Lipitor alone. That
decision followed a recommendation from an independent
Data Safety Monitoring Board.
The turnaround comes at a steep price. Pfizer placed
an enormous research bet on torcetrapib, sinking at
least $800 million and eight years into its development.
It was widely expected to succeed Lipitor, which had
$12.2 billion in 2005 sales. Pfizer had been developing
torcetrapib independently and in combination with
Lipitor to replace lost revenue when Lipitor goes off
patent around 2010. Pairing the two agents should have
made for a winning combination: Torcetrapib appears to
be a potent booster of HDL, so-called "good"
cholesterol, whereas Lipitor lowers LDL, or
"bad" cholesterol.
Can Pfizer bounce back, and if so, how? Says Les
Funtleyder, an analyst at Miller Tabak, the immediate
impact is actually positive; Pfizer doesn’t have to
fund the remainder of torcetrapib’s clinical trials.
But still, "You’re looking at the opportunity
cost. Presumably this was going to be a Lipitor
replacement. You’re looking at potentially $8 or 9
billion per year; that adds up to a lot in lost
sales."
Since 2003, Pfizer has spent more than $7 billion per
year on research. Yet the company’s most recently
launched blockbusters have been its erectile dysfunction
drug Viagra (sildenafil citrate) and the arthritis
painkiller Celebrex (celecoxib), receiving marketing
approval in 1998 and 1999, respectively, with combined
2005 sales of $3.3 billion. On a high note, its epilepsy
and pain medicine, Lyrica (pregabalin), launched in
2005, has been performing well, with 2006 worldwide
sales of $803 million as of the end of September.
Developing Recovery
Despite these star performers, Pfizer could still be
on thin ice. Through the first three quarters of 2006,
Lipitor has accounted for 27% of Pfizer’s global
product revenue and 30% of its U.S. product revenue.
"Lipitor will retain its blockbuster status through
2010 because it has a terrific user base," says
Funtleyder. "But Pfizer has Vytorin (ezetimibe/simvastatin,
Merck/Schering-Plough) hitting them on the efficacy side
and generic Zocor (simvastatin, Merck) hitting them on
the cost side. Some other statins will also be coming
off patent. So due to increasing competition from
generic statins as well as Vytorin and Crestor (rosuvastatin,
AstraZeneca), it’s unlikely Lipitor will see the same
growth it has in the past. Merck’s late-stage
candidate MK-0524A, which raises good cholesterol and
will presumably be used with generic statins, will
likely eat into Lipitor’s market share even
further."
Pfizer is also contending with patent expirations and
health concerns on some of its other best-sellers. Drugs
with about $14 billion in annual sales will have gone
generic by the end of 2007. In April 2005, Pfizer had to
pull its Cox-2 inhibitor Bextra (valdecoxib) from the
market due to health risks, wiping out $1.3 billion in
annual sales.
How can Pfizer recoup these losses? "It will
involve some combination of cost cutting, acquisitions,
and internal development," says Funtleyder. In
November, Pfizer announced it was cutting 20% of its
U.S. sales force. Analysts estimated the job cuts would
save Pfizer between $400 million and $500 million
annually. The company is expected to announce further
restructuring arrangements designed to trim corporate
fat come January.
With torcetrapib gone, Pfizer’s next-best pipeline
bet, according to Funtleyder, is probably its HIV
compound maraviroc. "It’s novel, late stage, and
potentially a big seller," he says. "Its
pancaspase inhibitor, designed to protect the liver
against damage from HCV infection, also looks like an
interesting near-term prospect." Pfizer has said it
will target the introduction of about six new products
per year starting in 2011.
