Pfizer: Time To Face The Lyrica Pain

Pfizer forecast flat US drug prices in 2019 and downplayed large M&A as a way to assuage near-term growth concerns, while investors brace for a challenging period cycling through the loss of Lyrica.

Pfizer Inc. CEO Albert Bourla led his first earnings call as the company's chief executive Jan. 29 and stuck to a similar message the company has laid out to investors for close to a year: that Pfizer will be well positioned for growth after cycling through the loss of Lyrica to generics beginning June 30, 2019.

Growth will come largely from innovation and the company's internal R&D engine, Bourla said, calling large-scale M&A a potential distraction that could derail the current growth plan. Getting to the second half of 2020 will feel like a long wait to investors, however, if there is not something to fill the void left by Lyrica (pregabalin). The pain drug was Pfizer's number-two seller in 2018, generating $4.62bn, behind only the pneumococcal vaccine Prevnar 13.

The company is relying on newer workhorses to pick up some of the slack, drugs like Ibrance (palbociclib), Xeljanz (tofacitinib) and Xtandi (enzalutamide). There is one near-term launch on the horizon, tafamidis for the treatment of transthyretin amyloid cardiomyopathy, which is pending at the US FDA with a decision expected in July. But while the drug could eventually become a rare disease blockbuster, the launch trajectory is expected to be slow given the current under-diagnosis of the condition. (Also see "Pfizer Has Tafamidis Data In Hand, But Market Development Still A Challenge" - Scrip, 27 Aug, 2018.)

Pfizer forecast revenues of $52bn-$54bn in 2019, a range that allows for slightly better or slightly worse performance than the $53.6 bn Pfizer generated in 2018, which represented 2% growth over 2017.

Some investors are hoping the company will patch a near-term revenue generator together through M&A. An acquisition of Amarin Corp. PLC, for example, would give Pfizer a near-term commercial opportunity in the fish oil product Vascepa (icosapent ethyl).

Bourla confirmed the company is looking proactively at business development opportunities in the commercial arena, but cautioned the focus is on the longer-term.

"We will be proactive, but proactive doesn't mean that our focus is how to change the profile of 2019. Proactive means how we're going to enhance the growth profile of Pfizer in the pivotal moment that is happening after June/July of 2020 or in 2021," Bourla said.

Bourla: Pricing Is Not A Growth Driver

At the same time Pfizer will be facing a steep patent cliff in 2019, the industry is experiencing another challenge when it comes to US drug pricing pressure. The company is among those that pulled back on price hikes on marketed drugs in January. Though it still implemented price increases on 10% of the portfolio, it kept most of those increases to 5% or less. (Also see "The Inevitable Is Coming: Price Increases, Starting With Pfizer " - Scrip, 19 Nov, 2018.)

Consistent price increases on marketed drugs have been a reliable source of growth for the industry as new blockbuster drugs have become harder to develop. An analysis of in-line price increases by the top 17 biopharma companies from 2013 through most of 2018 by Leerink found that price growth alone contributed on average 5% a year to industry growth over the last five years. (Also see "US Drug Pricing: What A Difference A Year Makes " - Scrip, 2 Jan, 2019.)

Bourla signaled that those days are over. "It's very clear that pricing is not going to be a growth-driver for us now, and I think in the future," he said. Pfizer forecast its US net drug prices will be flat in 2019 and globally pricing will decline low single digits.

A 2019 trends report by IQVIA released the same day also forecast industry-wide list prices would increase at a historically low 4% to 7% on an invoice basis, excluding rebates and discounts, and only 0%-3% on a net manufacturer revenue basis, accounting for rebates and discounts.

Pfizer believes its late-stage R&D engine is poised to deliver in the mid-term, with candidates like tanezumab for osteoarthritis pain, rivipansel in vaso-occlusive crisis for sickle cell disease and abrocitinib, a JAK1 inhibitor in development for atopic dermatitis.

The company, with partner Eli Lilly & Co., reported positive data from a second Phase III trial for the NGF inhibitor tanezumab in patients with moderate-to-severe osteoarthritis pain the same day, showing the treatment arm met all three co-primary endpoints at 24 weeks, statistically significant improvement in pain, physical function and the patients' overall assessment of their OA compared to those receiving placebo.

Safety is one potential issue with the class of drugs, but Pfizer believes the profile is shaping up to be manageable. Rapidly progressive osteoarthritis was observed in 2.1% of tanezumab patients and there was one event of osteonecrosis and one of subchondral insufficiency fracture in tanezumab-treated patients in the latest study.

Three Oncology Biosimilars

Pfizer also has the opportunity in 2019 for three potential biosimilar launches, all in oncology. The company could launch biosimilar versions of Roche's blockbusters Rituxan (rituximab), Herceptin (trastuzumab) and Avastin (bevacizumab) by year-end, management said. But Pfizer has faced challenges with the launch of its first biosimilar in the US, Inflectra (infliximab), a version of Johnson & Johnson's Remicade, which has struggled to gain market access around J&J's defensive contracting strategy.

The company is more optimistic about the opportunity for biosimilars in oncology in the US. "Our experience with infliximab in the US really is not a great analogy for what might be to come with our new oncology biosimilars, just because there are just very different dynamics in the I&I space compared to oncology," Pfizer Biopharmaceuticals Group President Angela Hwang said.

"Oncology drugs are shorter in duration of therapy, so that allows new patients to turn over faster, and it will make it easier for the physicians to initiate new patients on oncology biosimilars," she said. Still, no biosimilar versions of cancer drugs have launched in the US and it remains uncertain how physicians will respond to using the drugs initially given the importance of efficacy in the therapeutic area.

Pfizer's biosimilar franchise is picking up some traction, however. Biosimilars generated $769m in 2018, growth of 45%, with the bulk of the revenues, $503m, coming from outside the US.

The company's innovative health business grew 6% in 2018 to $33.4bn, while the Essential Health business declined 4% to $20.2bn.