Pfizer is betting big on cancer drugs after Covid decline

Pfizer is ready to move on from Covid. 

Now, the company is betting on cancer drugs to help it regain its footing after a rocky year marked by the rapid decline of its Covid business. It just might take a while before that bet pays off. 

Pfizer pitched its deeper push into oncology during a four-hour investor event last week. And it had a splashy 60-second Super Bowl ad that touted its initiative to “outdo cancer.” 

The shift comes at a crucial time for Pfizer. The pharmaceutical giant has been trying to shore up investor sentiment after its shares fell more than 40% in 2023. That share drop erased more than $100 billion in Pfizer’s market value.

Along with plummeting demand for its Covid products, Pfizer disappointed Wall Street last year with the underwhelming launch of a new RSV shot, a twice-daily weight loss pill that fell short in clinical trials and a 2024 forecast that missed expectations. The company has launched a $4 billion cost-cutting program, laying off hundreds of employees and shaving down its research and development spending. 

During the investor day, Pfizer laid out its priorities now that it has fully integrated with the targeted cancer drugmaker Seagen. That $43 billion Seagen acquisition doubled Pfizer’s oncology drug pipeline to 60 different experimental programs. 

With Seagen under its belt, Pfizer says its drug pipeline could produce at least eight blockbuster medicines by 2030, up from just five today. But the company did not disclose which drugs it believes could offer that potential. 

Some analysts noted that it might take a few years for some of Pfizer’s cancer drugs in mid-stage development to show pivotal clinical trial data and become less risky. 

Pfizer’s existing oncology portfolio is also facing some competitive pressure. Revenue from the blockbuster breast cancer drug Ibrance and prostate cancer treatment Xtandi, which Pfizer shares with Astellas Pharma, has declined over the past year. Both drugs are expected to lose market exclusivity in 2027. 

Still, some analysts came out of the investor day feeling encouraged. 

“The company is facing a number of challenges, but we believe the event was a success in laying out a path for the oncology business to help offset upcoming patent losses, and drive growth in the future,” Guggenheim analysts wrote in a note Tuesday. 

Boshoff said biologics represent “a more durable revenue potential” based on several factors. That includes upcoming patent expirations and potential pressure from President Joe Biden‘s Inflation Reduction Act. 

A provision of that law allows Medicare to start negotiating the prices of biologics as early as 13 years after they receive Food and Drug Administration approval, compared with just nine years for small-molecule drugs. The pharmaceutical industry has argued that would deter drugmakers from investing in small molecules.

Pfizer’s decision to rely more on biologics may also offer “better protection” against competition from cheaper copycats, Guggenheim analysts said in their note. Those copycats, or biosimilars, have historically had trouble gaining market share from biologic treatments. That’s unlike with drugs called generics, which are exact copies of small-molecule treatments. 

Small molecules will remain one of three core drug types of Pfizer’s oncology division. The other two are biologics, namely bispecific antibodies, and antibody-drug conjugates, or ADCs. 

Notably, the company is developing a “next-generation” platform for ADCs that combines Pfizer’s protein engineering and antibody design capabilities with Seagen’s ADC technology. Together, the companies have 12 ADCs in development, six of which are in early clinical trials or studies on animals.

JPMorgan analyst Chris Schott wrote in a note last week that the firm walked away from the investor event encouraged by the breadth of Pfizer’s mid-stage oncology pipeline. But he noted that it will take time before a number of the treatments show “pivotal data.”

That decline accounts for the upcoming loss of exclusivity of top-seller Ibrance, which raked in $4.75 billion in sales in 2023. 

But the company said it has a handful of breast cancer drugs in development that could become “potential growth drivers” as Ibrance sales fall. That includes a certain type of treatment called atirmociclib that could potentially be more effective and easier for patients to tolerate. 

Pfizer is testing the medicine as a second-line treatment for a certain type of breast cancer in a phase three trial. A second-line therapy is given when an initial treatment doesn’t work or stops working. 

The company also plans to start a separate late-stage trial on atirmociclib as a first treatment for the same condition in the second half of the year.

Pfizer expects genitourinary cancer to make up an estimated 35% of oncology sales by 2030, which would make it the largest franchise of the cancer business. That’s up from 20% in 2023. 

Pfizer is testing an experimental ADC called disitamab vedotin — which Seagen licensed from Chinese firm RemeGe — as a treatment for certain bladder cancers, with data from mid-stage and late-stage trials expected in 2025 and 2026.

Notably, RemeGe already sells that drug in China. Pfizer is also examining the medicine’s potential to treat breast cancer and other tumor types.

Meanwhile, Padcev, an ADC Pfizer shares with Astellas Pharma, in combination with Merck‘s immunotherapy Keytruda is becoming a new first-line standard of care for bladder cancer. Pfizer executives last week said Padcev had “mega-blockbuster” potential, which the company defines as raking in annual sales of more than $3 billion. 

Pfizer executives expect thoracic cancer to double its revenue contributions by 2030. 

Seagen brings an ADC called sigvotatug vedotin to this franchise. The drug recently entered a late-stage trial as a second-line treatment for a certain type of lung cancer, with data expected around 2026 to 2027. Pfizer also plans to test the ADC as a first-line treatment.

Guggenheim analysts said they expect the treatment to be one of Pfizer’s blockbuster oncology drugs by the end of the decade. Those analysts also expect a bispecific drug called Elrexfio, which falls under Pfizer’s hematology-oncology portfolio, to eventually become a top seller.

The hematology-oncology franchise is expected to account for 25% of the cancer unit’s sales by 2030, up from just 10% in 2023. 

The FDA has approved Elrexfio for patients with multiple myeloma who have tried at least four prior types of therapy. But Pfizer is conducting two late-stage clinical trials on Elrexfio as a second-line treatment, with data not expected until around 2025 and 2026.