It's been several years since Pfizer (NYSE:PFE) was in a position to consistently outperform the S&P 500 index. There are two words that explain why: patent cliff. The big pharma company simply faced too many challenges from drugs that were losing patent exclusivity.

Pfizer still hasn't completely recovered from the patent cliff. However, the worst of the negative impact is behind the drugmaker now, and Pfizer's prospects probably are the best they've been in years. One chart helps explain why that's the case.  

Scientists looking at monitor

Image source: Getty Images.

Partnerships aplenty

There's an old African proverb that says that it takes a village to raise a child. That concept also has relevance in today's rapidly changing biopharmaceutical world. It takes a network of partners to be competitive in drug development and commercialization. 

Pfizer isn't new to the scene of forging strategic partnerships. But the company's current network of partners is arguably the best that Pfizer has had.

Pfizer partner network diagram

Data source: Pfizer. Chart by author.

This chart doesn't show all of Pfizer's partners, but many of the most critical ones are included. The single most important partner for the company right now is Bristol-Myers Squibb. The two drugmakers co-market Eliquis, an anticoagulant that generated the fastest sales growth in Pfizer's entire product lineup last year.

BMS isn't the only other big pharma company with which Pfizer has joined forces. Pfizer teamed up with Germany-based Merck KGaA's subsidiary EMD Serono on immunotherapy Bavencio, which has already won approval for a couple of cancer indications. Other studies targeting additional types of cancer make up a big chunk of Pfizer's late-stage pipeline.

Pfizer and U.S.-based Merck won Food and Drug Administration (FDA) approval in December for type 2 diabetes drug Steglatro. The SGLT2 inhibitor stands a good chance of becoming a blockbuster for the two partners. Pfizer is also working with Eli Lilly on promising pain drug tanezumab. The companies hope to report clinical results later this year.

Big players aren't the only partners for Pfizer, though. A good example is the company's 2012 deal with SJF Pharmaceuticals Group to co-develop dacomitinib. Pfizer reported positive late-stage results for the drug as a first-line treatment for non-small cell lung cancer last year. The FDA is expected to announce an approval decision for dacomitinib by September. 

Some of Pfizer's partnerships came along with acquisitions the big drugmaker has made. For example, Pfizer acquired Hospira in 2015. Hospira had already teamed up with South Korea-based Celltrion on Remicade biosimilar Inflectra. Similarly, Pfizer's 2016 acquisition of Medivation brought with it a partnership with Astellas Pharma on prostate cancer drug Xtandi.

Again, these aren't all of Pfizer's partnerships -- but just the ones that have been mentioned reflect billions of dollars in potential sales. Partnering can definitely pay off.

Beyond partnerships

To be sure, Pfizer's fortunes don't rest solely on its partnerships. Several of the company's biggest winners were developed in-house, notably including cancer drug Ibrance and immunology drug Xeljanz. 

Pfizer could have other internally developed drugs on the way that have huge potential. Two cancer drugs particularly stand out: lorlatinib and talazoparib. Pfizer hopes to win FDA approval for lorlatinib in treating ALK-positive metastatic non-small-cell lung cancer (NSCLC) by August 2018. Andy Schmeltz, Pfizer's global president of oncology, recently stated that he thinks that talazoparib could be "the most potent PARP inhibitor" for treating treating metastatic breast cancer.

The acquisitions of Hospira and Medivation have already been mentioned, but they and other buyout deals represent another reason why Pfizer is in better shape than it has been in recent years. Pfizer's 2016 acquisition of Anacor Pharmaceuticals, for instance, brought Eucrisa into its pipeline. The eczema drug won FDA approval in late 2016 and could ultimately bring in peak sales of around $2 billion.

The next few years

You can bet that Pfizer's partnering isn't over. And some deals that it has made won't pay off for a long time to come.

As a case in point, the drugmaker has forged two different collaborations with Sangamo Therapeutics that will take a while to bear fruit. In 2017, Pfizer and Sangamo agreed to partner on development of gene therapy products for treating hemophilia A. Earlier this year, the companies struck a deal to develop gene therapies for treating neurodegenetive disorders amyotrophic lateral sclerosis (ALS) and frontotemporal lobar degeneration (FTLD) linked to mutations of the C9ORF72 gene.

Pfizer thinks that it could win approval for up to 15 new drugs or new indications for existing drugs over the next five years that have blockbuster potential. That's a big increase from the five blockbusters launched between 2011 and 2016 and the two blockbusters launched in the five years prior to that period. Can Pfizer achieve that goal? There's a pretty good chance that it can -- thanks in large part to its partnerships.

Editor's note: A previous version of this article incorrectly stated that Pfizer and Lilly plan to submit tanezumab for FDA approval later this year. The Fool regrets the error.