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Busy times for Pfizer
NEW YORK—As it continues to refocus itself back on pharmaceuticals and unload parts of its operation—such as its animal health businesses—Pfizer has been busy even as it shrinks, with several bits of news early this week, from the closing of a key research center to good news on a pneumococcal vaccine to rumors of a buyer for its animal health businesses and more.
One of the most publicly notable pieces of news was the closing of Pfizer's research center in Sandwich, England, which was the place Viagra—the company's $2 billion-a-year erectile dysfunction pill—was born. The more than 2,000 people who worked there were fired in 2011 and now the 213-acre site, once Pfizer's biggest European lab, is officially for sale. The sale of the center is reportedly part of the strategy to narrow Pfizer's focus to just five therapeutic areas, according to Pfizer CEO Ian Read, who announced the closure of the Sandwich facility in February 2011, just two months after taking the head office position at Pfizer.
Although he said he couldn't afford to be "sentimental" about the closure, "It was a very difficult decision for us," he maintained. The bottom line, though, is that the researchers there worked on allergies and respiratory diseases, "areas where we were less productive and less likely to win in the marketplace," Read noted.
Looking toward another aspect of Pfizer's re-focusing effort, Germany-based pharma giant Boehringer Ingelheim will reportedly consider buying Pfizer's animal health business, provided the company sells it in parts, Engelbert Tjeenk Willink, a member of BI's board of directors, told the Economic Times recently.
"It depends on for what geography and what exact portfolio they put it on the market," Willink told the publication, though he didn't say whether the company had actually bid for acquiring Pfizer's animal health business. In July 2011, Pfizer had announced a spin-off of its animal health and nutrition business, and companies like Novartis and Bayer are said to be in the running to buy the animal health portion of Pfizer.
Although the emphasis is on divestment, at least one contributor to the Seeking Alpha website, Stock Croc, sees recent takeovers that expanded the company as key to future market gains.
He noted in a March 9 post at the site that Pfizer is the largest pharmaceutical company in the world, generating almost 90 percent of its revenue through the sale of its various prescription medications and said "it maintains a wide economic moat through its extensive portfolio of medicines," adding that "In my opinion, the recent acquisition of Wyeth in 2009 secures Pfizer's leading place in the market and will contribute to its steady and reliable growth in the near future."
Furthermore, he noted that on Feb. 27 this year, "in a move to gain a foothold in the rapidly growing vitamin supplement market, Pfizer announced its acquisition of Alacer, the maker of Emergen-C, which is a leading brand of vitamin C supplement that sells over 500 million packets each year. The Emergen-C line of products is the largest selling product of its kind in the United States and is distributed through supermarkets, drug stores and health stores across the country. In my opinion, this acquisition will pay off for Pfizer, as more health-conscious consumers are beginning to look to the vitamin supplement market in view of preventive health concerns."
"The acquisition of Wyeth has made all the difference for Pfizer and has allowed it to surpass Novartis and remain ahead of Merck," he also noted. "It also operates at a slightly higher margin of 29 percent compared to Novartis and Merck, which both operate at margins of 21 percent."
On the more clinical side of Pfizer's current activities, March 12 saw an announcement that data from a Phase III study of Prevnar 13 (Pneumococcal 13-valent Conjugate Vaccine [Diphtheria CRM197 Protein]) met all study endpoints, showing immunogenicity and establishing a safety profile in children and adolescents aged 5 through 17 years. These data will support planned regulatory submissions seeking to expand the Prevnar 13 label in the United States, the European Union and various countries around the world, Pfizer says.
"As a global leader in pneumococcal disease prevention, we are excited about the potential to further define the clinical utility of Prevnar 13 with the aim of seeking to broaden prevention efforts to additional age groups," said Dr. Emilio Emini, chief scientific officer for the Vaccine Research division at Pfizer. "While pneumococcal disease most often strikes younger children, older children and adolescents who have certain medical conditions are also at heightened risk for contracting the disease."
Also on the clinical side, Pfizer reported very recently that it is ending a safety study of its pain drug Celebrex—Pfizer's fifth-best-selling drug at $2.52 billion in sales last year—because of difficulty finding patients. The trial was designed to measure the effects of Celebrex on patients who were taking the drug to treat juvenile idiopathic arthritis. The drug was originally approved in 1998, and Pfizer was required to do this safety study in 2006 after Celebrex was approved as a treatment for juvenile idiopathic arthritis. According to Pfizer, the U.S. Food and Drug Administration (FDA) had recently released it from this requirement.
Also in the whirlwind of Pfizer coverage on the news wires early this week was news that painkiller developers such as Pfizer, Johnson & Johnson and Regeneron Pharmaceuticals Inc. were trying to revive a class of arthritis drugs that had been sidelined by safety concerns for nearly two years because the FDA had said there was a clear association between the nerve-blocking medications and incidences of joint failure.
However, FDA has also noted that those side effects were less common when the drugs were used at lower doses, which left the door open for companies to revisit this class of drugs, which includes Pfizer's experimental tanezumab and also fulranumab and REGN475, which were being explored by J&J and Regeneron.
March 13 saw the announcement that Pfizer and its rivals had won the backing of an FDA advisory panel to continue development of this class of experimental painkillers. The 21 FDA advisers voted unanimously that the benefits of enhanced pain relief outweigh the risks of the so-called anti-nerve growth factor drugs—though this doesn't guarantee that the FDA itself will ultimately agree (although that is usually the case).
"There's significant risk but there are probably patient populations where there will be significant benefit," Lenore Buckley, professor of internal medicine and pediatrics at Virginia Commonwealth University School of Medicine in Richmond and chairwoman of the panel, said during the meeting.