What happened
Shares of Pfizer (PFE +1.21%) dropped 14.4% in June according to data provided by S&P Global Market Intelligence, which is a pretty substantial drop for a pharmaceutical giant with a current market cap of around $190 billion.
Much of the decline is tied to a clinical trial failure for Pfizer's breast cancer drug Ibrance, but investors also appear to have been spooked by chief business officer John Young's comments that imply the company isn't focused on making money off the COVID-19 vaccine it's developing with BioNTech (BNTX +2.29%).
So what
The Pallas late-stage clinical trial was testing Ibrance plus adjuvant endocrine therapy in patients with early-stage breast cancer. A successful trial could have substantially increased the potential market for Ibrance, which is currently only approved for advanced or metastatic breast cancer.
Unfortunately, an interim peek at the data by the independent data monitoring committee determined that Ibrance plus adjuvant endocrine therapy was unlikely to improve the length of time patients lived free of invasive disease compared to adjuvant endocrine therapy alone.
Unlike small biotechs, Pfizer doesn't live and die by a single drug, but the news is still a large disappointment, since Ibrance's multibillion-dollar opportunity in early-stage breast cancer was a major part of the company's growth story.
Image source: Getty Images.
On the COVID-19 front, comments from executives that the company is more focused on getting a vaccine onto the market than making a profit from it will score some points with the general public but are clearly a downer for investors.
Now what
Pfizer has other drugs in its pipeline and has still-growing approved products that can help it increase revenue from here, but it'll be a tall order to replace those billions in lost potential sales.
Perhaps the failure will get management a little more focused on making a profit off its COVID-19 vaccine -- assuming, of course, that it gets through clinical-trial development.
