Pfizer drug failures worrying investors

Pfizer has pruned its research pipeline as generic competition has intensified, and problems with new drugs are adding up. Pfizer has pruned its research pipeline as generic competition has intensified, and problems with new drugs are adding up. (Chris Ratcliffe/Bloomberg News)
By Linda A. Johnson
Associated Press / June 25, 2010

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TRENTON, N.J. — Yet another experimental drug heavily touted by Pfizer Inc. has foundered in advanced testing, raising worries about productivity problems at the world’s biggest drug maker.

Safety problems with potential osteoarthritis treatment tanezumab, quietly disclosed Wednesday evening, triggered a drop in Pfizer shares and a burst of notes to investors yesterday from analysts concerned about the trend.

“This is the second negative for [Pfizer] this week,’’ after the company pulled a cancer drug off the market, Miller Tabak & Co. analyst Les Funtleyder wrote. “We continue to have reservations about (the company’s) R&D capabilities and this announcement only confirms those.’’

That’s after a highly anticipated Alzheimer’s drug flamed out in March, a failure doctors called a big setback because many hoped it might be the first treatment to stop or reverse the disease.

This Monday, Pfizer said it was pulling bone cancer drug Mylotarg off the market 10 years after it got accelerated US approval, because recent research found the drug increased chances of dying in patients also getting chemotherapy.

Late Wednesday — at the urging of the Food and Drug Administration — Pfizer said it was immediately suspending worldwide testing of tanezumab in patients with osteoarthritis, a common condition in which the cartilage lining joints deteriorates.

Just last week, two small companies developing other pain drugs in collaboration with Pfizer announced a total of three drugs, for osteoarthritis or rheumatoid arthritis, weren’t reducing pain as much as expected.

That all adds up to significant potential pain for Pfizer shareholders, who also have seen five late-stage studies of different cancer drugs fail in the last 18 months.

Pfizer shares fell more than 3 percent yesterday, closing down 40 cents at $14.48.

“Biomedical R&D is one of the riskiest and most challenging businesses in the world,’’ said Pfizer spokesman Ray Kerins. “While our latest announcements demonstrate the risks and difficulties inherent in working with complex diseases, our pipeline demonstrates our ongoing commitment to focus on high-priority disease areas where there is significant unmet medical need.’’

Since acquiring Wyeth, Pfizer has significantly pruned research, eliminating many programs no longer considered priority areas or where early results didn’t justify large, very expensive studies in patients.

Now Pfizer desperately needs some research successes, given that its $11.5 billion a year cholesterol blockbuster Lipitor will see sales plummet when it starts getting generic competition at the end of 2011.

Meanwhile, at least eight other Pfizer drugs with high profit margins also will face generic competition in the next few years, BernsteinResearch analyst Tim Anderson noted.