Morningstar | Pfizer and Lilly Post Strong Tanezumab Data With Encouraging Side Effect Profile
Pfizer and Eli Lilly reported positive top-line phase 3 data for pipeline pain drug tanezumab with a relatively clean side effect profile, which supports our above-consensus expectations for the drug and undervalued calls on the stocks. We project tanezumab sales of $1.4 billion by 2022, ahead of consensus estimates of close to $300 million. While side effects have plagued tanezumab and the nerve growth factor class in the past, we believe the current clinical studies are better managing the side effects. Further, the overall strong clinical data helps reinforce both companies' wide moats.In the phase 3 study treating osteoarthritis pain, there were no signs of osteonecrosis and less than a 1.5% rate of rapidly progressing osteoarthritis, which we believe supports our 55% chance of approval for the drug in treating osteoarthritis pain. However, details around the severity levels of the side effects were not disclosed and are likely to come later in the year. We find the lack of osteonecrosis (the breaking down of bone tissue) encouraging as this side effect was a major reason for the clinical hold on this class of drugs close to six years ago. On the efficacy side, the drug showed statistical improvement in all primary endpoints, which is consistent with historical studies. We expect several more phase 3 studies in treating pain related to osteoarthritis, lower back, and cancer to read out over the next 12 months. With a 55% probability of approval in treating osteoarthritis pain and a 35% probability of approval in treating lower back pain, we project annual peak sales over $3 billion by 2024.
For a complete review of the NGF market and the outlook for tanezumab, please see our report "No Pain, Potential for Lots of Gain for Pfizer, Lilly, and Regeneron." Also, the report "Key Opinion Leader Call: Anti-NGF Treatments From Pfizer, Lilly, and Regeneron Address Unmet Need in Chronic Pain Market" provides insights from Thomas Schnitzer, MD, PhD, on the outlook for the NGF class.
Pfizer is a research-based biopharmaceutical company. The company is engaged in discovering, developing, manufacturing and distributing of healthcare products, including medicines and vaccines. The company manages its commercial operations through three businesses: Pfizer Biopharmaceuticals Group, which includes Oncology, Inflammation and Immunology, Rare Disease, Hospital, Vaccines and Internal Medicine business units, as well as a hospital business unit; Upjohn, which includes the company's solid oral dose brands such as Lyrica, Lipitor, Norvasc, Celebrex, Viagra, and certain generic medicines; and Consumer Healthcare, which is an over-the-counter medicines business.
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