In the old days, back in April, the big news everyone was waiting for from Pfizer ($PFE) was whether it would go ahead and file for FDA approval of its star pipeline drug palbociclib on Phase II data alone. The answer, signaled by the rolling of the drums Friday as trading in Pfizer's shares was momentarily suspended, was yes. But as Pfizer had recently shifted the primary focus to its wholly unexpected megamerger bid for AstraZeneca ($AZN), the response from investors was somewhat underwhelming.
Pfizer's shares ended up only 0.2%, with the news only buoying the company after a slide prompted by the AstraZeneca pitch.
On balance, ISI's Mark Schoenebaum called the shortcut to regulators an obvious plus for Pfizer, potentially giving it a big lead over some rival therapies in the pipeline.
"Overall, we view this as positive news. PALOMA-2 (Phase 3 Palbo trial) would not have completed until early next year, putting a filing in the 2H'15, so today's news gives PFE (assuming the NDA is accepted) an additional year on the market before any competition. Recall, NVS has said that it will file its CDK 4/6, LEE011, in 2016 and LLY could file Bemaciclib in 2017."
So why the flat response? Maybe because of Pfizer's terribly weak Q1 numbers, including the breakdown for its business units--which helped explain the predicament the pharma giant finds itself in now, answers Schoenebaum. Maybe it was because of the latest palbo data, which isn't quite as electrifying as earlier results.
"Filing for approval and getting approval are two different things," noted Bernstein's Tim Anderson, according to a report from The Financial Times. "Pfizer's discussion with the [FDA] should not be viewed as an implicit approval of sorts," though he gives it a 60 per cent chance of being approved in the first try. In biopharma, where nothing is certain, 60% odds of success are considered quite good.
You could add that palbociclib's star role in Pfizer's pipeline also underscores R&D's fundamental weakness in the company. After slicing billions of dollars out of its research budget, post-Wyeth, some investors may be wondering if the company has what it takes to counter generic competition. Behind palbociclib and its campaign to broaden the Prevnar 13 market, Pfizer's cupboards are starting to look bare. The AstraZeneca bid did nothing to hide that weakness, as the U.K. team ridiculed Pfizer's development expertise. And now it seems that Pfizer can't pull off a megamerger, even after offering AstraZeneca a big premium for its shares.
- here's the release
- get the report from the Financial Times (sub. req.)