What happened

Shares are tumbling after Pfizer (NYSE:PFE) reported that its breast cancer drug, Ibrance, came up shy in a phase 3 trial evaluating its use alongside adjuvant endocrine therapy in early breast cancer patients. The stock is down 7.6% as of 12:40 p.m. EDT on Monday.

So what

The healthcare giant announced disappointing results from its PALLAS study after the market closed on Friday, so today's the first day investors can weigh in on the news. Ibrance is already one of the most widely prescribed breast cancer drugs on the market, but hopes were high that Ibrance could gain even greater use if it met the mark as an early-line treatment option. 

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Image source: Getty Images.

The study was evaluating whether adding two years of adjuvant use of Ibrance alongside standard adjuvant endocrine therapy, which is given for five years, would work better than five years of adjuvant endocrine therapy alone. Ultimately, a review of data from the trial led independent monitors to conclude adding Ibrance to the regimen was "unlikely to show a statistically significant improvement in the primary endpoint of invasive disease-free survival (iDFS)."

If the study had been successful, it could have expanded Ibrance beyond its existing use in adult patients with HR+, HER2- advanced or metastatic breast cancer. In that setting, it's used in combination with an "aromatase inhibitor as an initial endocrine based therapy in postmenopausal women or in men; or with fulvestrant in patients with disease progression following endocrine therapy." Currently, Ibrance isn't indicated for use in early breast cancer.

Now what

Pfizer's research and development investment in Ibrance so far has been wildly successful. Since winning an FDA green light in first-line HR+, HER2- metastatic breast cancer in 2017, its sales have skyrocketed. In the first quarter of 2020, Ibrance contributed $1.2 billion in sales, up 11% from the same quarter last year. Its widespread use in advanced breast cancer is a big reason Pfizer's revenue has improved over the past five years following significant revenue headwinds caused by patent expiration on its mega-blockbuster, cholesterol drug Lipitor, in 2011.

Despite this trial setback, Ibrance is likely to remain a mainstay in its approved indication, and additional R&D efforts, including the development of new drugs, has Pfizer expecting it can still deliver a compound annual growth rate of at least 6% through 2025. That's not barn-burning growth, but it's solid growth that should continue supporting its 4% dividend yield, making it an interesting stock for income investors to buy.