Pfizer + Sutent = One Exciting Roller Coaster

Drug development can be a roller coaster -- sometimes with just a single drug.

Last month, Pfizer (NYSE: PFE  ) stopped a clinical trial early because Sutent was helping pancreatic cancer patients so well that it was inhumane to keep giving some patients a placebo. Yesterday, Pfizer stopped another trial testing Sutent in breast cancer patients, but for the exact opposite reason: Continuing the trial was futile, since it was clear that the drug wouldn't be able to beat Roche's Xeloda.

That's a lot different from saying Sutent failed -- it just couldn't do better than what's already available. Sutent still has a chance to enter the breast cancer market, since the drug is still being tested in three phase 3 trials and two phase 2 trials. In one, Pfizer is going the "if you can't beat 'em, join 'em" route by testing Sutent in combination with Xeloda. It's also challenging Roche's Avastin and sanofi-aventis' (NYSE: SNY  ) Taxotere in head-to-head trials.

Even if it fails to show an effect in breast cancer, Sutent is a mighty fine drug for Pfizer. Sutent is already approved for treating gastrointestinal and kidney cancers and managed $847 million in sales last year. A likely approval for the rare pancreatic cancer should push the drug into the magical blockbuster status.

However, Sutent's failure is a reminder to investors with high hopes for drugs such as Novartis' (NYSE: NVS  ) Afinitor and Onyx Pharmaceuticals' (Nasdaq: ONXX  ) Nexavar. It's not impossible for drugs to work in multiple cancers -- Eli Lilly's (NYSE: LLY  ) Gemzar is approved for four different types, for example -- but just because a drug works well in one cancer, that doesn't mean it's guaranteed to succeed in treating all cancers.

Pfizer is a recommendation of the Inside Value newsletter. If you're interested in picking through the wreckage for possible turnaround candidates, you should have the Inside Value team on your side. Check it out for free with a 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Novartis is a Global Gains recommendation. The Fool has a disclosure policy.


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