Pfizer believes the answer to its sliding valuation lies in oncology.
The company, which is coming off one of the worst years in its history, unveiled on Thursday a new business unit dedicated to cancer research. The division, created in the wake of Pfizer’s $43 billion buyout of Seagen last year, houses a sprawling portfolio of experimental medicines both companies discovered and acquired through deals. It also includes the marketed drugs Pfizer and Seagen have long been selling for a variety of tumor types.
Pfizer claims the pipeline it now has could produce more than eight blockbuster medicines by 2030, up from five today, and double the number of patients the company’s drugs currently treat. By then, biologic medicines should account for nearly two-thirds of its oncology revenue, up substantially from the 6% they comprise now, Pfizer said.
To achieve those goals, Pfizer will need steady sales growth and additional approvals for its currently marketed medicines. It will also need a pipeline of 16 experimental drugs across four broad areas of cancer research to come through in testing.
The oncology push comes after a tumultuous year for Pfizer marked by fast-declining sales for its COVID-19 treatments and little growth elsewhere. Company shares lost 43% of their value, and Pfizer responded with a cost-cutting plan that aims to reduce expenditures by $4 billion. Pfizer is facing pressure elsewhere too, as looming patent expirations and competition to some of its top-selling medicines leave the company with “uncertain long-term .. prospects,” wrote Leerink Partners analyst David Risinger.
Pfizer’s breast cancer medicine Ibrance, for example, has seen its market share decline amid a growing threat from Eli Lilly’s Verzenio and Novartis’ Kisqali. Oncology revenue has been stagnant too as sales in 2023 fell from $12.1 billion to $11.6 billion.
The company anticipates a boost from Seagen’s portfolio, which includes the marketed medicines Adcetris and Padcev and could boost its oncology revenues by another $10 billion by the end of the decade. Pfizer believes its marketing and manufacturing might can accelerate sales of both, surpassing what Seagen was able to do on its own.
Study results due later this year and early next could show whether Pfizer is on that path. The company expects readouts from marketed and experimental drugs in its four main areas of oncology research – thoracic, breast, genitourinary and blood cancers. Pfizer is also launching Padcev in first-line bladder cancers, a setting analysts believe could transform the drug into a multi-billion dollar product.
Additionally, the company is running Phase 3 trials for newer prostate and breast cancer drug prospects, including an experimental medicine called atirmociclib that could potentially supplant Ibrance if successful in a head-to-head trial.
After attending Pfizer’s presentation, Louise Chen, an analyst for Cantor Fitzgerald, wrote that she believes the oncology business will be the company’s “largest growth driver through 2030,” something that “is not reflected in the stock’s valuation yet.”
She added that Pfizer is “being conservative” in its revenue estimates because of Padcev’s likely growth in bladder cancer as well as “increasing usage” of antibody-drug conjugates, Seagen’s specialty.
