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Pfizer's Other Big News

Pfizer (NYSE: PFE  ) has confirmed plans to file its promising breast cancer drug palbociclib for FDA approval in the third quarter. If approved, Pfizer could enjoy significant revenue, given it will be dosed alongside Novartis' (NYSE: NVS  ) Femara, a breast cancer treatment for post-menopausal women, with nearly $400 million in annual sales.

However, the market for palbociclib could eventually be much bigger. Studies are also being conducted evaluating palbociclib alongside AstraZeneca's (NYSE: AZN  ) Faslodex, which generates roughly $700 million in annual sales, and instead of Roche's Xeloda, which had sales of more than $1.5 billion last year.

PFE Chart

PFE data by YCharts

Palbociclib put up impressive mid-stage trial results in patients with ER+ and HER2- advanced breast cancer. That subset makes up roughly 60% of advanced breast cancer patients.

Patients with metastatic breast cancer receiving palbociclib and Femara didn't see their disease progress for 20.2 months, versus 10.2 months for Femara alone. Overall survival, while not statistically signfiicant, also improved to 37.5 months from 33.3 months for those taking only Femara.

Since palbociclib has FDA breakthrough status, those results appear good enough that Pfizer thinks it has a good chance of winning FDA approval without phase 3 trial data in hand.

Competing for share
Increasingly, drug developers are conducting studies that would complement, rather than replace, current treatment. That offers the potential to enhance survival and significantly expand the market for breast cancer treatment, as longer-living patients progress from therapy to therapy.

Pfizer isn't alone in believing that there's a substantial opportunity to develop adjunct treatments. Novartis is also developing a drug for ER+, HER2 negative patients. Novartis LEE0011, which targets the CDK 4/6 enzyme, a key to cell proliferatin, entered phase 3 breast cancer trials in December

Additionally, Eli Lilly (NYSE: LLY  ) is also working on a CDK4/6 drug, LY2835219. Lilly has ongoing trials studying its use in mantle cell lymphoma, lung, breast, and skin cancer. In April, Lilly reported that 47 heavily pre-treated metastatic breast cancer patients participated in a phase 1 trial of LY2835219, and that the disease progressed in just 11 patients at 24 weeks.

Building an oncology franchise
If approved, palbociclib would join two Pfizer drugs already successfully competing for oncology market share. Xalkori, a drug approved as a treatment for ALK positive non-small-cell lung cancer generated sales of $88 million in the first quarter, up 69% from a year ago. Inlyta, a kidney cancer drug, also had sales of $88 million last quarter, up 46% from last year. Pfizer may also see its oncology presence jump markedly if it succeeds in winning over AstraZeneca shareholders.

AstraZeneca has rebuffed Pfizer's overtures so far, notably shutting down an offer earlier today. But that hasn't halted Pfizer's interest, which is driven, in part, by AstraZeneca's promising oncology drugs. Drugs in AstraZeneca's pipeline target ovarian cancer and non-small-cell lung cancer, and oncology drugs already on the market produced more than $700 million in revenue for AstraZeneca in the first quarter.

Fool-worthy final thoughts
The World Health Organization reports that there were 1.7 million cases of breast cancer diagnosed in 2012 globally, and that breast cancer incidence has climbed 20% since 2008. That suggests the market for breast cancer treatment may--unfortunately--continue to grow. According to the National Cancer Institute, spending on breast cancer could total as much as $25 billion in 2020, up from $16 billion in 2010.

The significant unmet need and patient population growth suggest that palbociclib could eventually generate significant sales for Pfizer. Currently, industry analysts predict palbociclib's annual sales could range between $1 billion and $6 billion a year.

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Todd Campbell

Todd has been helping buy side portfolio managers as an independent researcher for over a decade. In 2003, Todd founded E.B. Capital Markets, LLC, a research firm providing action oriented ideas to professional investors. Todd has provided insight to a variety of publications, including SmartMoney, Barron's, and CNN/fn.

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