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Pfizer's Bold Oncology Focus Promises Market Comeback

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Lauren Miller

March 10, 2024 - 12:00 pm

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Pfizer's Strategic Leap Towards Oncology: An In-Depth Look

In an unprecedented move to recapture its market stability, Pfizer Inc. turns its attention to the burgeoning potential of oncology. The pharmaceutical behemoth has unveiled its plans to focus on developing cancer therapeutics as it seeks to recover from a tumultuous year that witnessed the dwindling of its once-thriving Covid business. As part of this strategic pivot, Pfizer has been proactive in reassuring its investors and combating a significant 40% dip in share value through the year 2023.

Spurred by the urgent need to allay investor apprehension, Pfizer Inc. is doubling down on an aggressive campaign to champion cancer drugs. Hopes are high that this move will pave the path to a robust resurgence after witnessing the abrupt tapering off of its Covid-related ventures. Despite the enthusiasm, aligning these new endeavors with profitability could require a measure of patience.

At an extensive four-hour investor event, Pfizer pitched its renewed emphasis on the oncology sector. To further assert its commitment, the pharmaceutical titan also made waves with a stirring 60-second commercial aired during the Super Bowl. The advertisement was a bold call to action against cancer, hinting at the grandeur of the company's vision.

Learn more about Pfizer's Oncology Innovation

The stakes are high for Pfizer following a market value deflation exceeding $100 billion, a consequence rooted in a 40% nosedive of share prices in 2023. While the fading demand for Covid products has certainly been a contributing factor, the lackluster debut of its RSV vaccine, the inadequacies observed in clinical trials for a weight loss medication, and a 2024 earnings projection falling short of Wall Street expectations have compounded the challenges. Pfizer's response is manifested in an ambitious $4 billion cost-reduction plan, which includes significant layoffs and scaling back research and development investments.

Read about Pfizer's Cost-Cutting Strategies

Armed with its recent full-scale integration with Seagen, a niche cancer pharmaceutical firm, Pfizer is primed to redefine its product pipeline. The $43 billion Seagen acquisition has effectively doubled Pfizer's ventures into experimental oncology programs, bringing the total to an impressive 60. This enhanced pipeline is projected to yield at least eight blockbuster drugs by 2030, a substantial increase from the current five. Yet, details regarding which specific drugs might lead this charge remain closely guarded.

Pfizer's confidence is bolstered by its existing robust portfolio in oncology, though it acknowledges the looming challenges. Its widely recognized breast cancer treatment, Ibrance, along with prostate cancer medication Xtandi—developed in partnership with Astellas Pharma—are preparing to confront competitive pressures and imminent patent expirations in 2027.

Explore Pfizer and Astellas Pharma's Collaboration

Despite these hurdles, industry analysts express a cautiously optimistic outlook following the investor event. Guggenheim analysts, particularly, have recognized Pfizer's potential to navigate upcoming patent expirations, emphasizing the opportunities that its oncology business holds for fostering growth in the future.

Driving Innovation: Pfizer's Oncology Unit Unveiled

In unveiling its dedicated oncology division, Pfizer has sketched a detailed blueprint for its cancer research, one that is set to stretch into the decade's end. A multitude of experimental drugs and existing treatments encapsulate the unit's portfolio, a synergy of both Pfizer and Seagen's legacies.

Leading this new oncology division is Chris Boshoff, a Pfizer stalwart who has an extensive history within the company's cancer research and development echelons. Boshoff envisions a new epoch where the collective expertise of Pfizer and Seagen can make unprecedented strides in patient treatment outcomes.

Boshoff took pride in highlighting Pfizer's extensive global footprint, with an elaborate manufacturing apparatus across three continents, a sharp contrast to Seagen's sole site. Moreover, its expansive commercial team, three times larger than Seagen's, reinforces its market prowess in over 100 countries.

While sales projections remain unspecified for its oncology franchise by 2030, Pfizer anticipates that nearly two-thirds of its risk-adjusted oncology revenue will come from newly developed drugs and wider applications of existing ones.

The integration of Seagen is not merely an extension of Pfizer's capabilities but a carefully calculated decision anticipated to infuse an additional $10 billion in sales by 2030.

A Paradigm Shift in Pipeline Strategy

A monumental shift in Pfizer's pipeline strategy came to light, pointing to a future where biological drugs would be the central revenue stream. Chris Boshoff enlightened attendees about plans to augment the segment of biologic treatments within their pipeline from a scant 6% to a whopping 65% by the end of the decade.

Biologics, treatments cultivated from biological sources such as animals or humans inclusive of vaccines, gene therapies, and stem cell treatments, stand at the upper echelon in the hierarchy of prescription drugs within the United States. Historically, 94% of Pfizer’s cancer arsenal comprised small-molecule drugs, which are characterized by their chemical composition and lower molecular weights.

Through strategic refocusing, Pfizer aims to navigate around imminent patent expirations and legislative pressures from President Joe Biden's Inflation Reduction Act. This act will enable Medicare to negotiate biologics prices as soon as 13 years post-FDA approval, a timeframe more forgiving than the nine-year window for small-molecule medications. This distinction has sparked industry-wide concerns that investment in small molecules may decline as a result.

Understanding the Impact of the Inflation Reduction Act

By pivoting towards biologics, Pfizer might also secure a formidable buffer against the incursion of biosimilars, cheaper alternatives that have struggled to usurp market share from established biologic treatments. Conversely, generics—exact replicas of small-molecule drugs—have rapidly replaced their branded counterparts in the market.

The oncology division of Pfizer will continue to honor small-molecule drugs, while spotlighting biologics including bispecific antibodies and antibody-drug conjugates (ADCs), as its foundational pillars for future developments.

The Triad of Oncology Drug Typology at Pfizer

Pfizer’s oncology division is poised to champion three key drug types as its mainstay:

  1. Small-molecule drugs: These are synthetically manufactured treatments with low molecular weights.
  2. Bispecific antibodies: As biologics, these drugs have the unique capacity to bind two different antigens simultaneously. Their origin lies in living sources capable of producing antibodies.
  3. Antibody-drug conjugates (ADCs): Employing a hybrid approach, ADCs are designed to specifically target cancer cells, offering the precision of biologics and the chemical prowess of small-molecule drugs. With their nuanced approach, the FDA classifies ADCs within the biologic treatments category.

The promising merger of Pfizer’s protein engineering with Seagen's ADC technology has expedited the development of a "next-generation" ADC platform. This collaboration has already populated their ADC pipeline with twelve potential therapeutics, with the early development phase marking six of these.

Concentrating on Four Key Cancer Domains

Pfizer has honed in on four cardinal cancer categories central to its strategy:

  • Breast Cancer: Foreseeing a drop in Ibrance's contribution due to patent loss, Pfizer is cultivating potential growth drivers like atirmociclib, aimed at enhancing efficacy and tolerability for patients.

  • Genitourinary Cancer: Garnering the most substantial projected share of Pfizer’s oncology sales by 2030, this segment includes advanced bladder cancer treatment candidate disitamab vedotin.

  • Thoracic Cancer: Doubling its revenue contributions by 2030, thoracic cancer treatment with Seagen's sigvotatug vedotin shows promise in lung cancer therapies.

  • Hematology-Oncology: This segment is predicted to contribute a quarter of the cancer unit's sales by 2030, with Elrexfio's approval for multiple myeloma marking a notable milestone.

Discover Pfizer's Oncology Reports

Pfizer's Non-Oncology Endeavors

Beyond oncology, Pfizer will split its business into two units, focusing on U.S. and international commercial activity. Central to this division are vaccines centered on metabolic and inflammatory diseases.

This year, Pfizer is geared to unveil an updated version of its Covid vaccine, designed to combat a novel variant. While refining the vaccine to provide annual protection is underway, decisions on these advancements hinge on public enthusiasm for Covid prevention measures.

Pfizer's vaccine ambition extends to "fourth-generation" pneumococcal disease prevention and an RSV vaccine expansion for at-risk demographics. Combination vaccines for Covid and influenza also represent a pivotal area of their late-stage clinical innovation.

The development trajectory also includes GBT601 for sickle cell disease, as well as advanced research in cancer cachexia and obesity treatments. A weight-loss drug pill appears promising, particularly as a more accessible alternative to current injectable therapies facing shortages in the U.S.

Pfizer’s forward-looking endeavors highlight a meticulous blueprint for sustainable growth, leveraging its wide-ranging capabilities in both oncology and broader healthcare spaces. Through this, the company aspires to not only redeem its market position but also redefine its impact on global health outcomes.

In the face of dynamically shifting health concerns and technological advancements, Pfizer's strategic redirection towards cancer drug development while buoying its non-oncology pursuits showcases a visionary approach to reinvention and a steadfast commitment to pioneer life-saving treatments for the betterment of human health worldwide.