Heading into the Easter weekend Pfizer ($PFE) had to scramble to try and contain the damage from a report published online that four people had died and another four developed infections after taking the company's closely-watched rheumatoid arthritis drug tofacitinib. Widely considered one of the big pharma company's top late-stage drug prospects, the news instantly went viral and took a three percent bite out of Pfizer's shares.
In a research report, Wells Fargo analyst Larry Biegelsen noted that an abstract on a clinical trial of tofacitinib outlined the four deaths, noting that there was no clear explanation of what caused the deaths. As Pfizer shares swooned, the company quickly hustled out a release explaining that only one of the four deaths, triggered by respiratory failure, was drug related.
"The mortality rate from all causes across the tofacitinib RA development program, including the ORAL Sync study, is within the range of rates reported for biologic therapies for RA," Pfizer stated.
After a string of high-profile Phase III failures, Pfizer badly needs a big win. And with analysts enthusiastic about a potential mega-billion dollar market for tofacitinib, the experimental drug offers Pfizer one of only a few near-term possible pipeline victories. But the FDA has been particularly sensitive to cardio safety issues in recent years, which could pose a key threat to the program.
"Now that you're doing longer trials and you see some deaths, the cardiovascular scrutiny here is going to be really tight because the FDA obviously doesn't want another Vioxx issue," Hapoalim Securities analyst Jon Lecroy tells Reuters.
"It's a big overreaction," CLSA analyst David Maris told Bloomberg. Investors "saw four deaths and flipped out, and as they start to digest this a little more they'll realize it doesn't appear to be as bad as people thought."