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Pfizer's Must-Win FDA Vote

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It's not often you put "must-win" and a pharma company in the same headline. One drug hardly ever moves the revenue needle, so the corollary is also true: If a drug fails to gain approval, it usually isn't the end of the world.

But Pfizer's (NYSE: PFE  ) tofacitinib isn't just any drug -- it has the potential to be a multi-billion-dollar blockbuster. The drug treats rheumatoid arthritis, but unlike the big three -- Johnson & Johnson (NYSE: JNJ  ) and Merck's (NYSE: MRK  ) Remicade, Abbott Labs' (NYSE: ABT  ) Humira, and Enbrel, sold by Amgen (Nasdaq: AMGN  ) and Pfizer -- that have to be injected or infused, tofacitinib is taken orally.

First, though, the drug has to get by the FDA's committee of outside experts tomorrow. Briefing documents for the committee suggest the meeting isn't going to be a cake walk, but I think the drug will ultimately get a positive recommendation from the committee.

Tofacitinib's efficacy shouldn't be a huge sticking point. Pfizer might have trouble getting the higher dose approved because the FDA doesn't think the phase 3 studies justify it, but that won't be a major issue since the lower dose worked just fine.

Tofacitinib's bigger hurdle will come on the safety side. Patients taking the drug had an increased rate of serious infections and cancer. The infection risk probably isn't tofacitinib-specific, as other rheumatoid arthritis drugs have the same issues. Convincing the immune system not to attack the body's joints also scales back its ability to fight off infection. The cancer risk is more serious, especially for a therapy treating a chronic condition, but hopefully removing the higher dose will alleviate some of those concerns.

The safety issues have knocked down tofacitinib's sales potential substantially. Rather than taking much of the market immediately, Pfizer is likely to go after patients that have failed other treatments, get doctors comfortable with using tofacitinib, and then try to take market share from Remicade, Humira, and Enbrel.

But first it has to win that FDA panel vote and get the agency to follow suit.

While you're waiting for the FDA panel results, check out The Motley Fool's new free report: "Secure Your Future With 9 Rock-Solid Dividend Stocks." Just click here to get your free copy.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Pfizer, as well as creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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