Pfizer's (NYSE: PFE) cancer drug development is getting personal. Rather than going after a large market like it did with Lipitor, the company's drug candidate crizotinib targets the 3% to 5% of people with non-small-cell lung cancer who have a specific genetic mutation.

Slicing and dicing the market, which other drugs like AstraZeneca's (NYSE: AZN) Iressa have done, cuts into the volume of sales, but the strategy can pay off if the drug works well in the subset of patients with a genetic mutation. Increased effectiveness translates into an increased price, which can make up for the decreased sales volume.

So far, the personalized approach seems to be working well for Pfizer's crizotinib. In a phase 2 trial presented at the American Society of Clinical Oncology meeting, nearly all the patients showed some response to crizotinib and more than half of the lung cancer patients saw their tumors shrink significantly. Because the patients had already failed multiple therapies, doctors would have expected only 10% or so to respond to their next round of treatment.

All the patients had a genetic mutation that fused the EML4 and ALK genes together. Abbott Labs (NYSE: ABT) is working with Pfizer to develop a diagnostic test to detect that mutation.

Pfizer plans to apply for approval in the first half of next year, presumably as a late-stage treatment for patients with no other option. Pfizer is testing crizotinib head to head against a standard chemotherapy treatment of Eli Lilly's (NYSE: LLY) Alimta or sanofi-aventis' (NYSE: SNY) Taxotere. If that phase 3 trial comes up positive, Pfizer would be able to amend its label for use as a first-line treatment.

Crizotinib is never going to hit the sales level of Lipitor. But specific lung cancer patients, plus the potential for using the drug in other cancers that also have mutations in the ALK gene, should help move Pfizer's revenue line incrementally upward.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.