Pfizer’s focus is shifting away from Covid as it aims to revitalize its business with a strong emphasis on cancer drugs, a move set to unfold gradually despite high hopes.
The pharmaceutical giant disclosed its intensified commitment to oncology during an extensive four-hour investor event last week. Its initiative to “outdo cancer” was spotlighted in a flashy 60-second Super Bowl ad.
This strategic pivot arrives at a pivotal juncture for Pfizer. The company seeks to bolster investor confidence following a tumultuous period that saw its shares plummet by over 40% in 2023, wiping out more than $100 billion in market value.
The decline was spurred by waning demand for COVID-19 products, compounded by disappointments such as the lackluster debut of a new RSV shot and a weight loss pill that fell short in clinical trials.
Additionally, the 2024 forecast failed to meet expectations, prompting Pfizer to initiate a $4 billion cost-cutting program, which included layoffs and reductions in research and development spending.
At the heart of its renewed strategy is Pfizer’s complete integration with the targeted cancer drugmaker Seagen a $43 billion acquisition that doubled its oncology drug pipeline to encompass 60 different experimental programs.
Pfizer anticipates that this expanded pipeline could yield at least eight blockbuster medicines by 2030, a significant increase from the current five. However, specific details regarding these potential drugs were not disclosed.
Analysts caution that it may take several years for some of Pfizer’s cancer drugs in mid-stage development to generate pivotal clinical trial data and mitigate associated risks.
Additionally, Pfizer’s existing oncology portfolio faces competitive pressures, with revenue from blockbuster drugs like Ibrance and Xtandi declining over the past year. Both drugs are slated to lose market exclusivity in 2027.
Despite these challenges, some analysts emerged from the investor event feeling optimistic about Pfizer’s prospects. Guggenheim analysts, for instance, view the event as a success in outlining a trajectory for the oncology business to offset impending patent losses and fuel future growth.
Commercial Strategy: Long-Term Focus
Pfizer revealed its new cancer research division and outlined a comprehensive long-term strategy for it, extending through the decade.
“This newly formed oncology unit houses an extensive portfolio of experimental medicines resulting from Pfizer and Seagen’s collaborative efforts, as well as treatments acquired through various deals,” remarked Chris Boshoff, who leads the unit and previously spearheaded Pfizer’s cancer research and development endeavors.
Boshoff emphasized the combined organization’s heightened capabilities, highlighting Pfizer’s expansive manufacturing footprint with ten sites across three continents, in contrast to Seagen’s single manufacturing facility. He also underscored Pfizer’s extensive global commercial presence, operating in over 100 countries with a commercial team three times larger than Seagen’s.
While Pfizer did not offer a precise sales forecast for its oncology franchise by 2030, the company anticipates that approximately two-thirds of oncology revenue, adjusted for risk, will stem from new drugs and expanded indications for existing products by the decade’s close.
Reiterating its expectation of $10 billion in sales from the Seagen acquisition by 2030, Pfizer refrained from providing detailed guidance on Seagen’s growth trajectory until the end of the decade, noted UBS analyst Trung Huynh.
Cancer Drugs Business Revamp
Pfizer underscored a significant transformation in its drug pipeline strategy, particularly within its oncology division.
Chris Boshoff outlined the division’s intention to pivot towards biologic drugs as its primary revenue driver, aiming to elevate the proportion of these treatments in its pipeline from 6% to 65% by 2030.
Biologics, derived from living sources like animals or humans, encompass vaccines, stem cell therapies, and gene therapies, representing some of the most costly prescription drugs in the U.S. Historically, 94% of Pfizer’s cancer products comprised small-molecule drugs, chemically synthesized with low molecular weights.
Boshoff emphasized the potential of biologics to provide more enduring revenue streams, citing factors such as impending patent expirations and potential pricing pressure from President Joe Biden’s Inflation Reduction Act.
The act allows Medicare to commence negotiations on biologic prices 13 years post-FDA approval, compared to nine years for small-molecule drugs, a provision contested by the pharmaceutical industry.
Pfizer’s pivot towards biologics may offer a shield against competition from biosimilars, cheaper alternatives that historically struggle to gain market traction against biologic treatments, unlike generics, exact replicas of small-molecule drugs.
While small molecules will continue to constitute one of Pfizer’s core drug categories within its oncology division, alongside biologics, including bispecific antibodies and antibody-drug conjugates (ADCs), the company is also advancing a “next-generation” platform for ADCs.
This initiative merges Pfizer’s protein engineering and antibody design expertise with Seagen’s ADC technology, yielding a pipeline of 12 ADCs, six of which are in early clinical trials or preclinical studies.
JPMorgan analyst Chris Schott expressed optimism following the investor event, noting Pfizer’s robust mid-stage oncology pipeline, albeit acknowledging the time required for pivotal data to materialize for several treatments.
Primary Cancer Types:
Pfizer’s strategic focus in oncology revolves around four primary cancer types: breast cancer, genitourinary cancer affecting urinary and genital organs, thoracic cancer encompassing lung and head and neck cancer, and hematology-oncology targeting blood cancers like multiple myeloma and lymphomas.
Suneet Varma, Pfizer’s oncology commercial chief, outlined projections indicating a decline in breast cancer’s contribution to overall oncology sales, expected to decrease to approximately 10% by 2030 from its previous 40% share in the preceding year.
This forecast considers the imminent loss of exclusivity for Ibrance, Pfizer’s top-selling breast cancer drug that generated $4.75 billion in 2023 sales.
However, Pfizer remains optimistic, citing a pipeline of breast cancer drugs in development, including atirmociclib, a potential growth driver anticipated to offer improved efficacy and tolerability for patients.
Atirmociclib is currently undergoing phase three trials as a second-line therapy for specific types of breast cancer, with plans for a separate late-stage trial as a first-line treatment later this year.
In contrast, genitourinary cancer is poised to become the leading franchise within Pfizer’s oncology business, comprising an estimated 35% of oncology sales by 2030, up from 20% in 2023.
Pfizer is evaluating disitamab vedotin, an experimental ADC licensed from Chinese firm RemeGe, as a potential treatment for certain bladder cancers, with data from mid-stage and late-stage trials anticipated in 2025 and 2026.
Additionally, Pfizer is exploring disitamab vedotin’s efficacy in treating breast cancer and other tumor types, leveraging RemeGe’s existing sales of the drug in China.
Moreover, Padcev, an ADC co-developed by Pfizer and Astellas Pharma, in combination with Merck’s immunotherapy Keytruda, is emerging as a new first-line standard of care for bladder cancer.
Pfizer executives are optimistic about Padcev’s “mega-blockbuster” potential, defined as exceeding $3 billion in annual sales.
Pfizer executives anticipate a significant surge in revenue contributions from thoracic cancer, with expectations to double its revenue share by 2030.
Within this franchise, Seagen introduces sigvotatug vedotin, an ADC that has recently entered late-stage trials as a second-line treatment for a specific type of lung cancer, with data anticipated between 2026 and 2027. Pfizer also intends to evaluate this ADC as a first-line treatment option.
Guggenheim analysts foresee sigvotatug vedotin emerging as one of Pfizer’s blockbuster oncology drugs by the decade’s end. Additionally, they anticipate Elrexfio, a bispecific drug within Pfizer’s hematology-oncology portfolio, to eventually become a top-selling product.
The hematology-oncology franchise is poised to expand significantly, projected to contribute 25% of the cancer unit’s sales by 2030, a substantial increase from its 10% share in 2023.
While the FDA has approved Elrexfio for patients with multiple myeloma who have undergone at least four prior types of therapy, Pfizer is conducting two late-stage clinical trials to assess its efficacy as a second-line treatment, with data expected around 2025 and 2026.
Non-oncology Drug Portfolio
Pfizer is reorganizing its non-oncology business into two distinct divisions: a U.S. commercial unit and an international commercial unit, with a primary focus on vaccines, metabolic conditions, and inflammatory disorders.
This autumn, Pfizer intends to launch an updated version of its Covid vaccine tailored to combat a new strain of the virus. The company had previously outlined plans for “next-generation” iterations of its Covid shot, aimed at extending protection for up to a year.
However, Pfizer remains cautious, awaiting clear evidence of continued demand for COVID-19 interventions, as highlighted by Dr. Mikael Dolsten, the company’s chief scientific officer.
Dolsten highlighted Pfizer’s robust vaccine portfolio, which includes bacterial and viral shots. The company is currently evaluating a “fourth-generation” vaccine targeting pneumococcal disease, caused by a bacteria known to affect various bodily systems.
Expanding the scope of its existing vaccines, Pfizer is exploring the potential of its COVID-19 vaccine for respiratory syncytial virus (RSV) in high-risk patients aged 18 to 59, building upon its current approval for expectant mothers and adults aged 60 and above.
Additionally, Pfizer is advancing combination vaccines targeting multiple respiratory viruses, including a COVID-19 and flu shot currently in late-stage development.
Beyond vaccines, Pfizer is advancing an oral treatment for sickle cell disease named GBT601, positioned as a potentially superior alternative to its existing drug, Oxbryta.
Pfizer also anticipates releasing mid-stage trial data on its investigational therapy for cancer cachexia, a condition characterized by weight loss, muscle wasting, and weakness often seen in patients with cancer and chronic diseases.
Addressing the global concern of obesity, Pfizer is set to launch early-stage trial data on a once-daily version of its experimental weight loss pill, danuglipron, in the first half of the year. Furthermore, the company is developing a second obesity drug, details of which have yet to be disclosed.
Dolsten emphasized the potential impact of a weight-loss pill, citing its potential to address the significant demand for obesity treatments. Accessible in pill form, it could alleviate the shortage of injectable drugs currently prevalent in the U.S. market, potentially offering a more cost-effective solution for patients.
