10 Things For Pfizer's New CEO To Worry About
Executive Summary
Albert Bourla will face opportunities and potential pitfalls.
When Albert Bourla succeeds Ian Read as Pfizer Inc.'s CEO on Jan. 1, he'll take over the world's largest pharmaceutical company at a time when it enjoys several strong growth drivers (Eliquis, Ibrance, Xeljanz and Xtandi) but faces equally potent challenges in its key product areas.
The CEO transition itself promises to be a smooth one even as the road ahead may be daunting. Bourla was appointed to the new position of chief operating officer last year in a move that many felt signaled he was the heir apparent to Read.
(Pfizer's rival Merck & Co. Inc. recently took a different tack with its succession planning, rescinding a policy that would require CEO Kenneth Frazier to retire when he turns 65 in December 2019. Frazier took over as CEO of Merck in 2011, a few months after Read, who will remain executive chairman of Pfizer's board of directors.)
A 25-year Pfizer veteran, Bourla previously led the company's Innovative Health business and had also served as group president of the Vaccines, Oncology and Consumer Healthcare business. Under his leadership, the oncology business tripled in size and the vaccines business grew by 50%.
Those achievements make future growth all the more challenging, and Bourla's success in the near term will be driven by how the company answers 10 key questions:
- Can pediatric epilepsy data delay the loss of Lyrica exclusivity in the US until mid-2019?
“Hopefully,” the Lyrica patent expiration “hits the middle of 2019, we get the pediatric extension from the end of this year,” Pfizer Exec VP of Business Operations and CFO Frank D’Amelio told a Morgan Stanley conference Sept. 13.
Lyrica received approval for adults with partial onset seizures back in 2005. Pfizer’s pediatric epilepsy program, however, produced its first approval in March 2018 for children ages 4 years and up. In May, Pfizer announced positive topline results of a Phase III study of Lyrica oral solution in younger patients ages one month to four years. The study will be among those “submitted to the FDA for Lyrica pediatric exclusivity determination.”
- Could Pfizer take the NME approval crown in 2018?
Pfizer’s 2018 user fee calendar is heavily backloaded, with four novel oncologic applications carrying fourth quarter user fee goal dates. With some luck, Pfizer could end the year as the company with the most novel approvals.
While FDA is on track for a record new molecular entity and novel therapeutic biologic approval count in 2018, no sponsor has yet amassed more than two approvals. And those sponsors with multiple novel approvals – Eli Lilly & Co. (Emgality and Olumiant with Incyte Corp.), AstraZeneca PLC (Lumoxiti and Lokelma), Novartis AG (Aimovig with Amgen Inc. and Lutathera via its acquisition of Advanced Accelerator Applications SA), Merck & Co. (Pifeltro and Ilumya, which was been outlicensed to Sun Pharmaceutical Industries Ltd.), Array Biopharma Inc. (Braftovi and Mektovi) – do not have other novel applications under FDA review with fourth quarter 2018 user fee goals.
Pfizer cleared its first Q4 hurdle on Sept. 27 when FDA approved Vizimpro (dacomitinib) for first-line treatment of non-small cell lung cancer (NSCLC) patients with EGFR-activating mutations. (Also see "Keeping Track: Three Oncologics, A New Migraine Preventive, And First LPAD Antibiotic Clear US FDA" - Pink Sheet, 30 Sep, 2018.)
Next up is a breakthrough-designated indication for Pfizer’s third generation ALK tyrosine kinase inhibitor lorlatinib for ALK TKI-experienced patients with ALK+ non-small cell lung cancer. The goal date, originally in August, was extended to November 2018.
In December, Pfizer’s SMO inhibitor glasdegib has a user fee goal for previously untreated acute myeloid leukemia (AML) and the PARP inhibitor talazoparib has a goal date for treatment of germline BRCA-mutated (gBRCAm), HER2-negative breast cancer.
- Can Pfizer defend its existing oncology portfolio?
While Pfizer readies to launch new cancer therapies, the company must remain constantly active to defend and extend the centerpieces of its existing portfolio. (Also see "Pfizer's Three-Pronged Oncology Strategy Includes Expanding Ibrance, Xtandi, Developing Blockbuster Combos " - Scrip, 22 May, 2018.)
Notable battlefields include prostate cancer, where Pfizer’s Xtandi must contend with threats from generics of Johnson & Johnson’s Zytiga as well as a new J&J androgen receptor inhibitor, Erleada (apalutamide).
Erleada and Xtandi will face off in earlier stage prostate cancer patients. Erleada received FDA’s first indication for non-metastatic castration-resistant prostate cancer in February 2018, and Xtandi matched it with a supplemental approval for nmCRPC on July 13. (Also see "Keeping Track: Tpoxx Wins Green Light For Smallpox, Submissions Galore, And A Broader Approval For Xtandi" - Pink Sheet, 15 Jul, 2018.)
Pfizer’s ongoing Phase III ARCHES and EMBARK trials could extend use of Xtandi to hormone-sensitive prostate cancer. (Also see "Pfizer, Astellas Accelerate Xtandi's Timeline In Early Prostate Cancer" - Scrip, 23 Aug, 2018.)
Pfizer was late to the party for the most hyped development in oncology, the PD-1/L1 inhibitors, but could still make a blockbuster out of Bavencio thanks to clinical expertise and marketing clout. Developed with Merck KGAA, Bavencio is only approved by FDA for an orphan skin cancer and the ultra-competitive bladder cancer space, but renal cancer could offer Pfizer an opportunity.
Bavencio holds a breakthrough therapy designation for previously untreated advanced renal cell carcinoma, and Pfizer recently reported positive interim progression-free survival data from the Phase III JAVELIN Renal 101 trial of the combination of Bavencio and Pfizer’s Inlyta (axitinib). Pfizer said it will pursue a US regulatory submission with interim RCC data. (Also see "Pfizer/Merck KgAA Move Fast With Bid For Bavencio/Inlyta In Kidney Cancer Market" - Scrip, 11 Sep, 2018.)
Pfizer’s Xalkori (crizotinib) was the first ALK inhibitor to market, but it has been eclipsed thanks to the emergence of resistance mutations and new alternatives with better blood-brain barrier penetration. Roche’s Alecensa has emerged as the standard of care for first-line ALK+ NSCLC, and recent results from Takeda Pharmaceutical Co. Ltd.’s Alunbrig ALTA-1 Phase III have people talking about it as potential best in class. (Also see "Can Takeda's Alunbrig Take On Roche's Alecensa In First-Line ALK-Positive Lung Cancer? " - Scrip, 26 Sep, 2018.)
Nonetheless, Pfizer is still finding unmet needs to address with Xalkori. New breakthrough therapy designations were announced in May for mNSCLC with MET exon 14 alterations and for ALK-positive systemic anaplastic large cell lymphoma.
- Can Pfizer stay on top of the JAK inhibitor field?
Pfizer was a pioneer in Janus kinase inhibition, introducing the first JAK inhibitor, the oral medication Xeljanz, for rheumatoid arthritis in 2012. The company intends to stay at the forefront, but that requires a broad – and expensive – development effort in highly competitive markets.
Xeljanz built slowly to blockbuster status, aided by an indication for psoriatic arthritis in late 2017. Another new indication, for ulcerative colitis, cleared FDA on May 30, 2018. While the UC space is crowded, Xeljanz has a point of differentiation as the first oral drug indicated for moderate to severe disease.
(Also see "Pfizer's Xeljanz Pushed By New Tailwind From Approval In Ulcerative Colitis" - Scrip, 30 May, 2018.) Phase III is underway for Xeljanz in ankylosing spondylitis.
Xeljanz nonetheless must fend off new competitors, like Eli Lilly & Co.’s JAK1 and 2 inhibitor Olumiant (baricitinib) approved in June for RA. Hot prospects in clinical trials include candidates from AbbVie (upadacitinib), Galapagos and Gilead Sciences Inc. (filgotinib), and Bristol-Myers Squibb Co. (an oral tyrosine kinase inhibitor candidate described as having “biologic-like efficacy” while rivalling JAKs on safety). (Also see "Rheumatoid Arthritis Data Position Filgotinib Ahead Of Competition, But It's Playing Catch-Up " - Scrip, 12 Sep, 2018.) (Also see "Bristol Engineers An Oral TYK2 Inhibitor With Biologic-Like Efficacy That Rivals JAK Safety" - Scrip, 12 Sep, 2018.)
While some safety concerns with the class have receded with market experience, long-term safety remains an open question. (Also see "Pfizer's Xeljanz Approval In UC Includes Postmarket Study On Long-Term Effects" - Pink Sheet, 3 Jun, 2018.)
Pfizer is betting heavily on increasingly specific inhibition of the JAK pathway. “We have now 10 Phase II and III studies running with new generation of JAKs and 5 different NME JAK-related drugs in clinical studies,” President of Worlwide R&D Mikael Dolsten summarized during Pfizer’s second quarter earnings call in July.
Two of Pfizer’s novel JAK inhibitor candidates have earned breakthrough therapy designations from FDA: PF-04965842, which targets JAK1, for moderate to severe atopic dermatitis and PF-06651600, which targets JAK3, for alopecia areata.
The Pfizer JAK1 inhibitor started the Phase III JADE trial in atopic dermatitis in late 2017. “We are very excited about the JAK1 drug class, its rapid onset of action, with strong efficacy on eczema skin clearance and pruritus, itching, which has really the potential to be differentiating,” Dolsten said.
AbbVie is eyeing the same opportunity with upadacitinib, its JAK1 candidate. Upadacitinib also holds a BTD for moderate to severe atopic dermatitis, and started Phase III in summer 2018.
Pfizer is positioning its JAK3 inhibitor ‘600 to become the first drug to treat alopecia areata, an autoimmune condition thought to affect millions of people. The JAK3 inhibitor candidate earned its recent BTD with positive efficacy data from Phase IIa, and the company plans to start Phase IIb/III within months. (Also see "Pfizer Eyes First-To-Market Opportunity In Alopecia" - Scrip, 18 Sep, 2018.)
- Was sticking with tanezumab a good idea?
After a series of disappointments, Pfizer de-emphasized neuroscience in January 2018, ending discovery and early development efforts. The company nonetheless kept one major neuroscience project alive: the nerve growth factor (NGF) inhibitor tanezumab for pain in collaboration with Lilly. (Also see "Pfizer Exits Early Neuroscience, But M&A Could Allow Later Re-Entry" - Scrip, 9 Jan, 2018.)
NGF inhibition holds promise an alternative to opioids and NSAIDs for pain, but development of the class has been plagued with clinical holds for neuro-musculoskeletal and joint issues. Nonetheless, two NGF inhibitors have made it to Phase III: tanezumab and Regeneron Pharmaceuticals Inc. and Teva Pharmaceutical Industries Ltd.’s fasinumab.
In July, Lilly and Pfizer reported data from the first of six Phase III trials for tanezumab. Both doses of the biologic met primary efficacy endpoints in patients with pain due to osteoarthritis. The companies have five other Phase III trials ongoing, including OA, chronic low back pain and pain from cancer bone metastases. (Also see "Pfizer/Lilly's Tanezumab Reduces Osteoarthritis Pain, But Is It Safe?" - Scrip, 18 Jul, 2018.)
Fasinumab significantly reduced osteoarthritis pain in its first Phase III to report data. (Also see "Regeneron And Teva's Fasinumab Crosses One Threshold; More Remain" - Scrip, 16 Aug, 2018.) However, Teva and Regeneron had to discontinue higher doses of fasinumab in Phase III trials due to adverse events.
- Will Pfizer’s investment in vaccine development pay off?
Pfizer is one of the few big pharmas that still maintain an active vaccine pipeline. Indeed, D’Amelio noted that the money saved by exiting neuroscience went to speeding up development of Pfizer’s 20-valent pneumococcal vaccine.
“We’re all in on getting that Prevnar 20 to market as quickly as we can,” D’Amelio told the Sept. 13 Morgan Stanley conference.
In September, the 20-valent candidate, also known as PF-06482077, received breakthrough therapy designation. (Also see "Keeping Track: An Approval For Ajovy, A CRL For Ruconest, And Some Submissions from J&J" - Pink Sheet, 23 Sep, 2018.) Pfizer plans to start Phase III trials by year-end.
In April, Pfizer’s meningococcal type B vaccine Trumenba picked up its second breakthrough therapy designation, for use in pediatric patients ages 1 to 9 years old. Trumenba was approved in 2014 under its first BTD for 10-25 year olds.
Pfizer is also testing a prophylactic vaccine for Clostridium difficile infection in a large Phase III trial, Ian Read pointed out during the second quarter call. “This is a significant disease burden,” he said. “We need to invest. We need to make sure we get to the events and expand the cohorts.”
- Can Pfizer become a major player in rare diseases?
Pfizer is bidding to be a bigger player in the rare disease space. The company has four new chemical entities in pivotal trials, Pfizer Innovative Health Group President John Young noted in an Aug. 27 call to discuss Phase III results for one of those candidates, tafamidis.
Pfizer describes tafamidis as a potential rare disease blockbuster. The company intends to file for approval to treat transthyretin cardiomyopathy (ATTR-CM) by year-end 2018, D’Amelio reported. FDA awarded the oral transthyretin-stabilizing agent a breakthrough therapy designation for ATTR-CM in May.
While Pfizer touted Phase III data showing tafamidis reduced all-cause mortality and cardiovascular hospitalization, the company acknowledges that it will have to make substantial efforts to build the market. (Also see "UK Changes Approach To Trials In Patients With Prior ATMP Therapy" - Pink Sheet, 29 Aug, 2018.)
“We believe we can uniquely leverage our heritage and capabilities with cardiologists, including our Eliquis field force, to raise awareness of this disease and drive diagnosis,” Young said.
Pfizer intends to file for FDA approval of tafamidis to treat Phase III data showing tafamidis can reduce all-cause mortality and cardiovascular-related hospitalization has Pfizer Inc. anticipating a potential rare disease blockbuster, but it conceded Aug. 27 that first it will have make substantial efforts to build the market in transthyretin cardiomyopathy (ATTR-CM).
Pfizer is also committed to gene therapy, with three programs in the clinic. The lead program, a Factor IX gene therapy for hemophilia B in collaboration with Spark Therapeutics Inc., “has started to enroll patients for Phase III,” Read reported in July. “This marks the first gene therapy Phase III program that Pfizer has initiated, and this remains an area of high interest to us.” The hemophilia B gene therapy also holds a BTD.
Pfizer and Spark reported Phase I/II data for the Factor IX gene therapy, known as SPK-9001, in May. The same month, FDA Commissioner Scott Gottlieb told an Alliance for Regenerative Medicine meeting that hemophilia is the first indication for which FDA will consider accelerated approval of a gene therapy. (Also see "Gottlieb On Gene Therapies: 'Very Seductive' To Think About Accelerated Approval Pathway " - Pink Sheet, 7 May, 2018.)
- Can Pfizer’s biosimilar business become commercially successful?
Pfizer has brought three 351(k) BLA applications to FDA approval, but its biosimilar business has yet to generate significant revenue.
Pfizer and its subsidiary Hospira launched the first biosimilar competition to J&J’s Remicade in late 2016 as the US commercialization partner for Celltrion’s Inflectra (infliximab-dyyb). Pfizer’s internally developed Ixifi (infliximab-qbtx) was approved in December 2017, but the company does not plan to launch it in the US. (Also see "Pfizer's Infliximab Biosimilar Approved In US But Won't Launch Against Inflectra" - Scrip, 14 Dec, 2017.)
Approvals for Retacrit (epoetin alpha-ephx) and Nivestym (filgrastim-aafi) followed in May and July 2018, respectively. Pfizer has not yet launched Retacrit; Nivestym became available on Oct. 1, priced at an aggressive discount. (Also see "Pfizer Launches Nivestym At An Aggressive Discount To Other Filgrastim Products" - Scrip, 2 Oct, 2018.)
Pfizer has two more biosimilar candidates in the works: a trastuzumab product, which received a complete response letter announced in April, and an adalimumab candidate is in Phase III.
Pfizer has struggled in its attempts to market Inflectra. The company has pointed to J&J’s fierce rebating strategy to explain the lack of market share for Remicade biosimilars, and is challenging its rival's rebate practices in an antitrust lawsuit. (Also see "Humira's 'Unique' Number Of Patents Makes Biosimilar Entry Risky, Pfizer Says " - Pink Sheet, 10 Apr, 2018.)
The issue of competition (or the lack of it) in the biosimilars marketplace is likely to remain a front-burner issue on legal, regulatory and commercial fronts. (Also see "From Interchangeability To Exclusivity: US FDA Looks For Ways To Make Biologics Market More Competitive" - Scrip, 7 Sep, 2018.)
- Can Pfizer manage the pricing debate?
One outgrowth of Pfizer’s struggles to market Inflectra has been a corporate push for broader rebate reform. (Also see "Pfizer Expects Rebate Reform By HHS Will Extend Quickly To Private Market" - Pink Sheet, 31 Jul, 2018.)
Rebate reform also provides an avenue for Pfizer and other pharmaceutical firms to shift the focus in the high-stakes public debate over drug pricing from sponsor list prices to the broader health care industry’s complex system of contracts and rebates.
The rebate issue could also serve to draw public fire away from Pfizer’s charitable assistance programs. Pfizer is subject to a five-year corporate integrity agreement with the Department of Justice regarding claims that the company used its charitable foundation to fund copays of Medicare patients for Sutent, Inlyta, and Tikosyn to mask price increases. (Also see "Pfizer Agrees To Oversight Of Charitable Assistance Programs In DOJ Settlement" - Pink Sheet, 24 May, 2018.)
And blaming middleman, however successful it's been so far, can't deflect attention from product pricing entirely. Pfizer has felt this acutely in recent months, having been forced to rescind mid-year price increases after suffering criticism from President Trump. (Also see "Pfizer Agrees To Roll Back Prices On 40 Drugs, Yielding To Pressure From Trump" - Pink Sheet, 10 Jul, 2018.)
The politics of drug pricing will likely only become more intense as the 2020 presidential election approaches. Read's approach to Trump – keeping an arm's length relationship at first, but eventually acquiescing to his policy approach – parallels the relationship the Republican party has had with the President.
With that in mind, it seems that price increases for existing products will be a difficult revenue strategy to rely on in coming years.
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Will Pfizer find a buyer for its consumer health business?
In October 2017, Pfizer announced that its consumer business was for sale. The OTC and wellness portfolio, largely the legacy of Pfizer’s merger with Wyeth in 2009, features brands including Advil, Robitussin and Centrum.
Pfizer’s major corporate restructuring, announced in July 2018, breaks consumer health out of Pfizer’s innovative medicines unit as a separate business. (Also see "Pfizer Deals Consumer Health Its Own Hand, Plays Waiting Game For Bids " - Pink Sheet, 11 Jul, 2018.)
"We continue examining options,” Bourla told Pfizer’s second quarter earnings call. “We will make our decision by the end of the year.” (Also see "Pfizer Remains Flexible On Consumer Health In Restructuring" - Pink Sheet, 1 Aug, 2018.)
Jessica Merrill contributed to this report.