Pfizer Inc's Palbociclib Delivers the Goods

Pfizer (NYSE: PFE  ) could use another blockbuster right now, and data presented from the phase 2 PALOMA-1 study for its CDK 4/6 inhibitor palbociclib over the weekend suggests it likely has one. The only major issue now could be the Street's already aggressive expectations, particularly as they pertain to Pfizer filing for approval on the basis of phase 2 data and getting to the market ahead of Lilly (NYSE: LLY  ) and Novartis (NYSE: NVS  ) .

Good data, as expected
Hype and hope have been running pretty high on palbociclib (or "palbo") already, as I have seen more than one sell-side analyst build a peak sales estimate for the drug seemingly based on Pfizer getting all of the potential market in a relatively short time.

For its part, Pfizer delivered what it promised – strong data that suggests palbo is not only approvable, but a meaningful step forward in the treatment of ER+/HER2- breast cancer (roughly 50% to 60% of breast cancer cases in the U.S. and EU).

In the PALOMA-1 study of 165 patients with ER+/HER2- breast cancer, the combination of palbo and letrozole nearly doubled the period of progression-free survival, from 10.2 months to 20.2 months. The study was not powered to detect an overall survival benefit, as only about 36% of trial events had accrued at the point presented. While the overall survival benefit was not statistically significant, the 4.2-month benefit is at least in the right direction.

And now?
The next major question is whether or not the company can and will file for FDA approval on the basis of phase 2 data. There is a precedent here, as Novartis's drug Afinitor was approved on that basis. In fact, I believe almost all, if not all, drugs approved for ER+/HER2- breast cancer have been approved on the basis of progression-free survival. If the FDA allows a filing with the data already in hand, Pfizer should see palbo reach the market in 2015.

Stacking up as a very competitive drug
Comparing drugs across trials is difficult and often misleading because differences in enrollment criteria and other trial design details can lead to significant differences. That being said, palbo looks like it will be a competitive drug, but likely not competition-free.

Lilly also reported data on its CDK 4/6 inhibitor bemaciclib (LY2835219, or '219). The data came from a subset of a phase 1 study and included an overall response rate of 19%, a clinical benefit rate of 49%, and a disease control rate of over 70%. Importantly, only two of the responding patients got an accompanying hormone therapy (like letrozole), and palbo did not show this kind of efficacy as a single agent. Whether that means that bemaciclib will work even better with accompanying hormone therapy is definitely an interesting question.

It is also worth noting that Lilly may be a more easily tolerated drug. The data presented on '219 included G3/G4 neutropenia in just 11% of patients, while 49% of patients receiving palbo had grade 3 neutropenia. Once again, comparing across studies is difficult, but this could be a meaningful edge for Lilly.

When it comes to Novartis, there is a lot less to go on. Novartis has moved LEE011 into phase 3 studies very quickly but, to the best of my knowledge, has not published human clinical data yet. It could be that early results in human studies were just that powerful, or it could also be that the preclinical work suggested that LE011 was much more selective than palbo and Novartis is assuming that it will leapfrog palbo on that basis. Either way, it's a higher-risk strategy and underlines some of the differences in how Pfizer and Novartis manage their pipelines.

Significant potential in the market
Assuming that these drugs are priced similar to Herceptin, the market for CDK 4/6 inhibitors in breast cancer alone could be worth around $7 billion a year in the U.S., EU, and Japan (on the basis of of 136,000 patients/year with metastatic disease). While the post-menopausal group (the patient group Pfizer enrolled for the PALOMA-1 study) is smaller, about 90,000, the number of non-metastatic cases is over 350,000 a year, and this would be a likely follow-on group to target.

The bottom line
Palbo should be a winner for Pfizer. The company will owe a single-digit royalty to Amgen, but the drug should be very profitable to manufacture and revenue of $2 billion to $4 billion does not seem unreasonable at this point. The major question now is whether the FDA will be on board with an early filing, allowing Pfizer to get to market before Lilly and Novartis and establish the drug as a new standard of care.

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