Pfizer on fire with early FDA nod for blockbuster Ibrance, $15B Hospira buyout
- The FDA on Wednesday gave accelerated approval to Pfizer's likely blockbuster Ibrance (palbociclib) for treatment of advanced breast cancer. Then, on Thursday, the company announced that it would be buying top injectables provider Hospira for $15.2 billion.
- Ibrance is approved for use in combination with letrozole, for the treatment of postmenopausal women with estrogen receptor-positive, human epidermal growth factor receptor 2-negative (ER+/HER2-) advanced breast cancer. It is the first FDA-approved cyclin-dependent kinase 4/6 (CDK 4/6) inhibitor and was approved as a breakthrough therapy because preliminary clinical evidence showed that it may offer substantial benefits over existing treatments.
- Pfizer's Hospira bid is its first major acquisition attempt since its much-publicized (and failed) bid to purchase UK-based AstraZeneca in 2014. The deal is expected to substantially increase the company's revenue and accentuate its global portfolio while also giving Pfizer access to Hospira's biosimilar pipeline.
Talk about a double-whammy. Industry watchers had long been asking what Pfizer would do to make up for the patent expirations of drugs like Lipitor and Celebrex (as well as the impending 2018 expiration of Lyrica). Now, with a new blockbuster cancer med expected to rake in $4 billion per year by 2020 and access to Hospira's portfolio and pipeline, Pifzer has a lot more breathing room and opportunities for revenue growth.
First, Ibrance: Although there are many drugs and combination therapies available to treat breast cancer, there's an unmet medical need for treatment improvements. In fact, based on data from the National Cancer Institute, 232,670 American women received a breast cancer diagnosis in 2014, and 40,000 died from the disease in the same year. Ibrance is available for order through specialty pharmacies.
Now, Hospira: As Pfizer CEO Ian Read put it, "The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and [earnings per share] growth in the near term." It didn't come cheap, though—Pfizer is paying a 39% premium on Hospira's already-high stock price.