Pfizer might achieve No.3 in cancer but needs deals to hit $25bn sales target
A Pfizer executive divulged some of the company’s internal targets for progress in oncology yesterday, which unsurprisingly revealed that the pharma giant has some pretty ambitious plans to grow its presence in this highly desirable area of medicine.
The company wants to be number three in the oncology world and grow sales of cancer drugs ten-fold by 2018, which implies annual revenues of $25bn. Consensus forecasts indicate that the company is already on track to succeed on the first goal by 2014, even before the acquisition of Wyeth, according to EvaluatePharma. Roche and Novartis are ranked one and two (see tables below). However, the $25bn sales target looks very ambitious, and suggests that Pfizer will need to keep its foot firmly on the deals pedal to come close to that figure (Pfizer spoilt for choice of oncology assets, July 14, 2009).
The table below illustrates the stranglehold that Roche has on the oncology space, with its number one ranking appearing safe, considering its substantial market share. As owner of three of the most valuable drugs across the industry, let alone the oncology space, it would take either a major breakthrough elsewhere or a major setback for Roche for this position to change. (Biotech set to dominate drug industry growth June 17, 2009)
At number two, Novartis also looks fairly safe, with a share of the oncology market double that of Pfizer, now and in the six years time.
|Top 15 Oncology & Immunomodulator Sales|
|Annual sales ($m)||Market Share||Market Rank|
|Johnson & Johnson||1,047||2,273||14%||2.1%||3.4%||11||7|
Still, once beyond these two companies, ranking places are much more closely contested. For example, a similar analysis conducted by EP Vantage in March, when Roche closed the deal to buy Genentech, found that Bristol-Myers Squibb would in fact be the world’s third biggest oncology player in 2014, with a 6% share of the market (Roche seals dominance of oncology market, March 27, 2009).
Since then, both companies have seen downgrades to sales forecasts, but Bristol-Myers has been hit harder, with numbers for breast cancer treatment Ixempra and experimental immunotherapy ipilimumab trimmed by analysts, and most significantly for EGFR inhibitor Erbitux. Consensus for 2012 sales has fallen by 27% since March, to $924m, as sales have missed forecasts following more widespread testing for the KRAS gene, which is an indicator of efficacy.
Bringing something to the party
Pfizer is certainly throwing lots of R&D dollars at the oncology area. Assuming projects are not culled after the merger with Wyeth goes through, which is probably unlikely, the company will be involved in 49 oncology R&D projects, the biggest category but only just. There are 48 projects are ongoing in CNS areas and 44 in systemic anti-infectives.
|No. of R&D Products by Therapy Area||2009|
|Oncology & Immunomodulators||49|
|Central Nervous System||48|
Still, the large proportion of these are Pfizer derived. Of the 49, only 12 are Wyeth projects. Of those in late stage development, Pfizer is also potentially bringing a lot more to the oncology effort.
|Key oncology pipeline candidates|
|Company||Product||Pharmacological Class||First Introduction||2014 sales ($m)||Lead Indication|
|Phase III||Pfizer||Axitinib (AG-13,736)||VEGFr kinase inhibitor||31/12/2011||231||Renal cell carcinoma (RCC) [Phase III];|
|Pfizer||CP-751871||Anti-IGF-1R MAb||31/12/2011||163||Non-small cell lung cancer (NSCLC) [Phase III];|
|Pfizer||CDX-110||EGFr cancer vaccine||31/12/2010||80||Glioblastoma multiforme [Phase III];|
|Wyeth||SKI-606||Tyrosine kinase inhibitor||31/12/2012||73||Leukaemia, chronic myeloid (CML) [Phase III];|
|Wyeth||CMC544||Anti-CD22 MAb-calicheamicin conjugate||31/12/2011||56||Non-Hodgkin's lymphoma (NHL) [Phase III]|
|Wyeth||Neratinib (HKI-272)||HER2 (ErbB-2) inhibitor||31/12/2012||53||Breast cancer [Phase III];|
|Phase II||Pfizer||CP-675,206||Anti-CTLA4 MAb||31/12/2012||90||Non-small cell lung cancer (NSCLC) [Phase II];|
|Pfizer||AG-14,699||Poly (ADP-ribose) polymerase (PARP) inhibitor||31/12/2012||80||General cancer indications [Phase II]|
|Pfizer||SU14813||Multi-kinase inhibitor||31/12/2011||-||Breast cancer [Phase II]|
|Pfizer||PF-3512676 (ProMune)||TLR9 agonist||-||-||Non-small cell lung cancer (NSCLC) [Phase II];|
Therefore, whilst the huge $68bn deal might have added to Pfizer's biotechnology footprint, it did little to increase the group's presence in oncology, now or in the future. Pipeline cancer candidates are only forecast to be generating an additional $1.21bn by 2014, according to consensus forecasts. Whilst these figures will be risk adjusted to a certain extent, it leaves Pfizer with a long way to go to reach the $25bn target. The ambitions were reported by Bloomberg yesterday, which tuned into a presentation given by the company in Berlin, by the head of Pfizer's European cancer business.
As the first table suggests Pfizer's share of the oncology market is actually set to decline by 2014, on current consensus. This means the company will have a fight on its hands to retain any future number three ranking, as well as trying to reach this lofty sales goal.
However, as EP Vantagealso reveals today, there are plenty of unpartnered oncology candidates out there. Big acquisitions are likely to be off the menu following the Wyeth deal, meaning licensing could be the order of the day. If Pfizer is serious about that internal projection, the deal news flow should be healthy in the coming years.