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
2008 2014 CAGR 2008 2014 2008 2014
     Roche 17,320 25,501 7% 34.2% 37.7% 1 1
     Novartis 4,888 6,556 5% 9.7% 9.7% 4 2
 Pfizer+Wyeth 2,646 3,178 3% 5.2% 4.7% 6 3
     Bristol-Myers Squibb 1,819 3,132 9% 3.6% 4.6% 7 4
     Pfizer 2,551 2,997 3% 5.0% 4.4% - -
     Eli Lilly 2,875 2,921 0% 5.7% 4.3% 5 5
     AstraZeneca 4,890 2,793 (9%) 9.7% 4.1% 3 6
     Johnson & Johnson 1,047 2,273 14% 2.1% 3.4% 11 7
     Merck KGaA 830 2,184 18% 1.6% 3.2% 12 8
     Bayer AG 1,215 2,060 9% 2.4% 3.0% 9 9
     GlaxoSmithKline 715 2,040 19% 1.4% 3.0% 14 10
     Sanofi-Aventis 5,237 1,921 (15%) 10.4% 2.8% 2 11
     Merck+Schering-Plough 1,384 1,148 (3%) 2.7% 1.7% 8 12
     Takeda 1,112 1,079 (0%) 2.2% 1.6% 10 13
     Celgene 793 834 1% 1.6% 1.2% 13 14
     Abbott Laboratories 651 793 3% 1.3% 1.2% 15 15

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
       Systemic anti-infectives  44
       Musculoskeletal  24
       Cardiovascular  12
       Respiratory  12
       Endocrine  11
       Gastro-intestinal  10
       Genito-urinary  6
       Sensory Organs  6
       Blood  5
       Various  3
       Dermatology  -
       Total  230

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]; 
Report Total 1,205

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.

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