Pfizer faces 2019 burdened by competitive challenges
- Pfizer expects revenue growth to flatten in 2019 as generic and biosimilar competition strengthens and the company absorbs the impact of foreign exchange rates expected to be unfavorable.
- With Pfizer's second best-selling drug, Lyrica, set to lose exclusivity in June, the pharma forecasts a $2.6 billion negative impact on revenues due to competitive challenges — nearly $1 billion greater than the headwinds Pfizer faced in 2018.
- Taking those effects into account, Pfizer predicts revenues this year between $52 billion and $54 billion, a range with a midpoint well below Wall Street estimates of $54.3 billion cited by Credit Suisse. In 2018, sales rose by 2% to total $53.6 billion, Pfizer said Tuesday.
In buying Celgene for $74 billion earlier this month, Bristol-Myers Squibb did what Pfizer failed to do twice before in its years-long pursuit of a mega-deal.
Yet now, with new CEO Albert Bourla at the helm, Pfizer is signaling large-scale acquisitions are no longer a major focus, turning instead to a product pipeline it expects to drive revenues over the next five years.
"Large M&A could derail us from execution," said Pfizer's Bourla on a Jan. 29 conference call as the pharma disclosed fourth quarter earnings. "Large M&A requires thousands of people to work together to integrate companies."
Previously, Bourla explained, Pfizer was in search of dealmaking opportunities that could bring revenues immediately as it sought to weather patent expiries on top drugs like Celebrex (celecoxib) and, more recently, Viagra (sildenafil).
Now, however, Pfizer sees the upcoming loss of exclusivity for Lyrica (pregabalin) in June as the last major patent cliff the pharma faces through 2025.
While Bourla hedged that he "never says never" on potential dealmaking, adding to Pfizer's product pipeline appears the priority for capital deployment.
The company has rapidly built an oncology business that, while lacking a leading immuno-oncology asset, delivered four new product approvals last fall. Sales of Ibrance (palbociclib), a breast cancer drug, topped $4 billion in 2018, growing by more than 30% four years after the drug's first approval in the U.S.
Sales of slightly older drugs like Eliquis (apixaban) and Xeljanz (tofacitinib) continue to rise as well — growth Pfizer is counting on to offset lower revenues for Viagra and Lyrica.
On the experimental side, Pfizer reported Tuesday positive results from the second Phase 3 study of tanezumab in osteoarthritic pain. Safety worries remain a hurdle for the drug, but the pharma and its partner Eli Lilly expect the drug to add to their product portfolios in the near future.
More near term, Pfizer has filed for approval of tafamidis in transthyretin amyloid cardiomyopathy, a rare disease. An OK for one form of the drug could come by July.
The potential financial benefit of Pfizer's pipeline projects, however, remains some distance away. In 2019 and 2020, competitive headwinds coupled with pricing pressures in the U.S. look set to keep growth flat or modest at best.
Pfizer, Bourla said in statement, is positioning itself to a "period post-2020 where we expected a higher and more sustained revenue growth profile."
Living by the strength of R&D, of course, comes with its own questions and challenges, not least of which is the pharma's struggles in the crucial area of immuno-oncology.
Pfizer on Tuesday disclosed discontinuation of three Phase 3 studies of Bavencio (avelumab), the checkpoint inhibitor it's partnered on with Merck KGaA. Recent trial setbacks have crimped the therapy's prospects, and these updates further underscore the limitations facing the drug.
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