Is Pfizer About to Have Another Megablockbuster Drug in Its Lineup?

Pfizer (PFE -0.19%) already has at least eight products that generate annual sales of $1 billion or more. The U.S. Food and Drug Administration (FDA) recently approved another of Pfizer's drugs that could add to the list. In this Motley Fool Live video recorded on Jan. 19, Motley Fool contributors Keith Speights and Brian Orelli discuss whether Pfizer could have another megablockbuster in its lineup with atopic dermatitis drug abrocitinib.

Keith Speights: Pfizer, of course, is a major player in the COVID-19 vaccine market. It's going to be a major player in the COVID-19 therapy market as well. But on a non-COVID front, the FDA approved Pfizer's JAK inhibitor abrocitinib last week in treating atopic dermatitis or eczema.

Pfizer's CEO Albert Bourla has stated in the past anyway, that the company expects this drug to reach peak sales of at least three billion dollars. But the FDA's approval included some safety warnings as expected.

Brian, do you think Pfizer really will have another mega-blockbuster on his hands with abrocitinib?

Brian Orelli: Yeah. I think it would've been a major blockbuster if it was approved as first-line therapy after topical treatments, but it's approved for people who aren't responsive to other systemic drugs, so that means patients will get TNF inhibitors first. They might also get Regeneron's and Sanofi's Dupixent, which is an oral medication although it's probably not as effective as the TNF inhibitors or the JAK inhibitors. So many patients will respond to those therapies and then they won't ever go on a JAK inhibitor.

The initial expectation I think was that JAK inhibitors would be used first because they're easier to take. The oral medications or the TNF inhibitors, have to be injected or infused. Some doctors might prescribe JAK inhibitors off-label, they're allowed to do that so they could prescribe them before the TNF inhibitors.

We'll have to wait and see what insurers do about coverage. Typically, insurers follow the FDA recommendations or make the requirements even more stringent than the FDA recommendations. But if the JAK inhibitors are priced cheaper than the TNF inhibitors, you could see insurers allowing them to go first even though that's not what the label says, because it might be cheaper for them to have a patient on a JAK inhibitor compared to a TNF inhibitor.

I think that could be the way that Pfizer could potentially capture some of this market if they can price it at the right price that allows insurers to prefer the JAK inhibitors over the TNF inhibitors.

Speights: You just gave a great explanation of why it's really hard to peg a price tag on peak sales for a drug. There are so many variables involved. You just don't know what payers are going to do, you don't know what physicians are going to do.

My best guess is that Pfizer will have a blockbuster with abrocitinib. I think it could realistically hit one billion dollars or more in sales. I don't think it's going to get to that three billion-dollar mark, I could be wrong. But I think those safety warnings could be enough to keep it from hitting that level.

Orelli: I think that's a good guess. The other thing is maybe they can actually generate enough safety data to show that it's not a class effect and then that could help the drug in, let's say, four or five years after they could get enough long-term safety data.