Late last month, the U.S. Food and Drug Administration (FDA) granted priority review to Pfizer's (PFE 2.40%) multiple myeloma (MM) drug candidate elranatamab. With a decision from the FDA expected sometime this year, the investigational therapy could be approved quite soon.
But how much revenue could an approval generate for the pharmaceutical company? Looking at the medicine's phase 2 clinical trial results and the MM market, let's figure that out.
A potent therapy for a challenging disease
Multiple myeloma is a blood cancer that affects the plasma cells produced by the body's bone marrow. Plasma cells are responsible for the critical bodily function of making antibodies to help a person fight off infection and disease.
Aside from a compromised immune system, the symptoms of MM often include bone pain, fatigue, weakness, and shortness of breath. Unsurprisingly, the prognosis of the condition is often discouraging. Most patients end up on numerous lines of therapy because a response is often short-lived, so the median survival rate is merely five years.
Due to the high unmet need for MM treatments, many drugmakers have been working toward developing new therapies for the condition. Pfizer's elranatamab could be among the most promising.
Pfizer enrolled patients with relapsed or refractory MM (cancer that returns or doesn't respond to treatment) who received at least three classes of therapies in the past into a phase 2 study. These patients achieved an objective response (the drug helped reduce the size of a tumor or amount of cancer in the body) at a rate of 61%, with an 84% probability of maintaining that response at nine months. The chance of progression-free survival was quite high at 63% at the nine-month mark. That means a clear majority of patients on elranatamab improved.
For patients who had exhausted virtually all other treatment options, these results represent an encouraging step in the right direction.
Image source: Getty Images.
The sales potential is immense
With approximately 34,000 new cases of MM in the U.S. and 176,000 globally each year, oncologists and their patients will certainly welcome more potent treatments. The global MM drug market was worth $19.7 billion in 2021, and market research company Imarc Group anticipates that it will grow to $28.1 billion by 2027.
Elranatamab will have to compete against the likes of Johnson & Johnson's Darzalex and Bristol Myers Squibb's Revlimid. But since no one drug is capable of successfully treating all cases of MM, there is room for elranatamab to succeed. That's why I believe that the therapy can capture 10% of the global MM drug market. This would equate to $2.8 billion in peak annual sales potential.
Even for a pharmaceutical giant such as Pfizer, that's a massive sales lift from a single product. For context, this would be a 4.1% boost to the $69.1 billion revenue base that analysts are projecting for 2023.
Pfizer is a compelling dividend stock
Pfizer's 4.1% dividend yield is more than twice the S&P 500 index's 1.7% yield. And with the dividend payout ratio set to come in at just over 48% in 2023, investors can rest assured that the payout is sustainable. This is why the stock appears to be a strong buy for income-oriented investors.
