Could Pfizer's and Lilly's Long-Awaited Osteoarthritis Drug Flop?

Pfizer (PFE 1.19%) and Eli Lilly (LLY -0.45%) have worked together for years on the development of an osteoarthritis pain drug, tanezumab. In this Motley Fool Live video recorded on March 24, 2021, Motley Fool contributors Keith Speights and Brian Orelli talked about the hurdles the two companies must jump to win U.S. approval for the drug. (Note: A U.S. Food and Drug Administration [FDA] Advisory Committee voted 19-1 against tanezumab on March 25. The FDA has not yet made a final decision on approval of the drug.)

Keith Speights: Later today an FDA Advisory Committee, or actually they may have already started meeting, but today an FDA Advisory Committee is meeting. They'll also be meeting tomorrow, and they're reviewing the regulatory filing for tanezumab in treating osteoarthritis pain. Pfizer and Eli Lilly -- Lilly's ticker is LLY, Pfizer is PFE -- teamed up on this candidate and they started development, I think, 15 years ago so this has been a long time coming, and so they've submitted for approval.

The FDA released their briefing documents recently, just over the last few days. It gave faint praise to this drug. It said that it's effective, but it said that the efficacy is modest and that it doesn't appear to be any better than non-steroidal anti-inflammatory drugs that are already available on the market.

Brian, do you think Pfizer's and Lilly's long-awaited osteoarthritis drug could even fail to win FDA approval after this really faint praise from the briefing documents?

Brian Orelli: Yeah, you know what? Talk about a blast from the past. This is a drug that binds the nerve growth factors. I went back into the Wayback Machine, I found an article about anti-NGF (nerve growth factor) drugs that I wrote in late 2010. That was more than a decade ago. The title of the article was "The Painful Death of a Promising Drug Class."

I didn't even realize that Pfizer was still working on developing its NGF drug. I heard that one count that Pfizer and Eli Lilly had run 41 clinical trials on tanezumab. [laughs] I don't know what to make of this.

The issue here is that the drug has the ability to reduce pain, which makes sense because the mechanism of action, you're blocking the script factor that activates pain response. But the bigger issue seems to be with safety, and that was what my article was about a decade ago, and the safety issues just haven't gone away, which makes sense because all the drugs are working on the same molecule and the molecule seems to be the problem.

Some osteoarthritis patients progress rapidly, which causes joint damage, and the FDA doesn't seem to be convinced that the companies can identify those patients and get them off the drug quick enough. That seems to be the biggest issue. I don't understand quite the mechanism here, but I wonder if when you get the pain that goes away, now that people are using these joints like they're younger and the osteoarthritis is still there even though the pain isn't there, and so then that's causing more damage. You need something that's treating the mechanism that's causing the osteoarthritis, not just making the pain issue go away.

Speights: Right. We'll know very soon. This week we'll know whether or not the advisory committee is going to give a thumbs-up to recommending approval for tanezumab. Even if it does win FDA approval, which I think is still quite possible, the commercial expectations for the drug aren't nearly as high as they were just a few years ago. Just a few years ago, analysts were projecting this could be a blockbuster drug. I think those expectations have been downgraded quite a bit. I don't know what the consensus is now, but it's not nearly what it was. I don't think this necessarily is going to be a blockbuster for Pfizer really, even if all goes well.

Orelli: I don't think it's a major issue one way or the other, whether they get approval or not. It's not going to change the success or failure of Pfizer.