Monday, December 04, 2006

Torcetrapfffffff: Pfizer's Big Bust

Pfizer's decision to discontinue the development of it's HDL-boosting torcetrapib candidate/savior over the weekend leaves the Big Pharma with little choice but to 1. accelerate its restructuring plans and 2. start eyeing up some of its pharmaceutical competitors for a 2007 snack.

It is unknown right now whether torcetrapib's fatal flaw--it raises systolic blood pressure along with HDL which led to more, instead of fewer, deaths and an increase in a raft of cardiovascular problems like angina--spells the end of the entire CETP (cholesterol ester transfer protein) class. Roche will have to decide whether to send the Phase II R1658, another CETP inhibitor, into pivotal trials next year. R1658 as well as Pfizer's early-stage torcetrapib backups allegedly do not raise systolic BP, but then again we didn't know about torcetrapib's problems until Pfizer's $800 million, 15,000-patient Phase III was well underway.

While it's been a disappointing couple of years for Pfizer shareholders torcetrapib was always the light at the end of the tunnel. Can they persevere in its absence? The company has, though belatedly at times, attempted to press all the right buttons: back in April 2005 it suggested it was open to change and that it would save $4 billion by 2008; this past summer an overdue management shake-up saw the elevation of Jeffrey Kindler, a relative outsider, to CEO; its R&D show had analysts in a forgiving mood, enjoying the newfound "transparency and accountability" from Pfizer management even while at the same time acknowledging the company had significant business development goals to accomplish if it were to return to growth after a flat 2007-8.

But despite all the upbeat prognosticating at that meeting ("we are first in class, we are best in class," etc.) torceptrapib tanked. A week before that, Pfizer bailed on asenapine, the Phase III antipsychotic it put a $100 million downpayment on in 2003 via a deal with Akzo Nobel, when that drug disappointed in pivotal trials.

The cuts to Pfizer's vaunted sales force announced in November will now likely be augmented with further restructuring. And in-licensing and M&A will be ramped up--but how? It's hard to see how continuing its string of interesting but relatively small acquisitions--Rinat, PowderMed, Vicuron, Idun, Angiosyn, even stretching back to Esperion in 2003--can fill the massive hole created by the genericization of atorvastatin (Lipitor) in 2011.

Torcetrapib was supposed to be by Pfizer's own estimation the most important new cardiovascular medication in years. What a difference a day makes.

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