Weekly Healthcare Note: Pfizer and JNJ

The past week was handful of events for the pharmaceutical sector. The world’s largest drug maker Pfizer (NYSE:PFE) announced impressive clinical results for its blockbuster potential drug Eliquis. This comes as another boost to the drug maker, whose experimental breast cancer drug exhibited encouraging data very recently. On the other hand, the FDA related the company’s anti-smoking drug Chantix with higher risk of heart attacks even as the agency couldn’t ascertain the same. Meanwhile, Johnson & Johnson (NYSE:JNJ) received FDA approval for expanded use of its blockbuster potential cancer drug Zytiga.

Pfizer

Pfizer was in the news for a variety of reasons particularly relating to its cardiovascular franchise. In a recent phase III clinical study, its blockbuster potential blood thinner Eliquis managed to significantly reduce blood clots risks in patients suffering from venous thromboembolism or VTE (a blood clot within a vein) compared with a placebo. ^[1] The outcome will certainly help Pfizer gain access to much larger markets as the drug is currently approved in many countries (excluding the U.S.) for preventing blood clots in patients who have knee or hip replacements along with recent European approval for NVAF (irregular heart beat). However, the drug is yet to enter the large U.S. market due to pending FDA approval. Without which, it cannot reach expected peak sales of $3 billion. This could lead to a downside in our price estimate. But, we do anticipate the FDA to follow its global counterparts. Read our note Pfizer’s Eliquis Vies For FDA Approval With Encouraging Results In Recent Study for detail analysis.

In a separate event, the U.S. FDA issued a safety notice against Chantix, a smoking-cessation drug and part of cardiovascular franchise in our model, saying patients taking the drug may have a higher rate of heart attacks or strokes than those who are not on the treatment, following separate clinical trials. ^[2] However, the results of the study cited were on a small sample as out of 4,190 patients taking Chantix, only 13 were found to have experienced heart attack or stroke against 6 in 2,812 patients who were on placebo. As a result, we don’t believe this is enough to hurt Chantix’s growth prospects. ^[2] The drug generated more than $700 million in revenues in 2011 and we expect continued growth in sales following increase in number of prescriptions being sold.

See Full Analysis For Pfizer here

Johnson & Johnson

JNJ’s blockbuster potential oncology drug Zytiga has secured U.S. FDA approval for expanded use in metastatic castration-resistant prostate cancer (mCCRPC) patients (no longer responsive to reduction of available androgen/testosterone by chemical or surgical means), who have not yet been treated with chemotherapy but have failed hormone treatment.

Further, European Medicines Agency’s (EMA) committee has expressed positive opinion for the similar indication. ^[3] We believe on back of addition of new indications, the drug could clock $1 billion in peak sales. Read our note JNJ: Zytiga Inches Towards Billion Dollar Sales As FDA Approves Expanded Use for further details.

See Full Analysis For Johnson & Johnson here

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1. Pfizer, Bristol-Myers Blood Thinner Cuts Risk of Clots in Study, Nasdaq, Dec 8 2012 [↩]
2. Pfizer’s Chantix Produced More Heart Concerns, FDA Says, Bloomberg, Dec 13 2012 [↩] [↩]
3. U.S. FDA Approves Expanded ZYTIGA® Indication For Treatment Of Metastatic Castration-Resistant Prostate Cancer, JNJ New Release, Dec 10 2012 [↩]