Pfizer Drug Withdrawn from Market - Analyst Blog

Pfizer Inc. (PFE) recently announced its decision to voluntarily withdraw its pulmonary arterial hypertension (PAH) drug, Thelin, from the market. The company decided to withdraw Thelin based on a review of safety information on the drug from clinical studies and post-marketing reports.

Although Thelin was not recommended for use in patients who have mild to severe problems with their liver or raised levels of some liver enzymes, Pfizer said that a new potentially life-threatening idiosyncratic risk of liver injury has been associated with the use of Thelin.

Thelin, which became a part of Pfizer's portfolio with the company's June 2008 acquisition of Encysive Pharmaceuticals Inc., is currently approved in the EU, Australia and Canada. Based on Pfizer's decision, the product will be withdrawn from all three markets. The company also said that it is discontinuing all clinical studies with the candidate.

Pfizer had initiated a phase III study with Thelin in late 2008 to address concerns raised by the US Food and Drug Administration (FDA) about the product's efficacy. The FDA had issued three approvable letters for the candidate.

Competitors like Actelion (ALIOF), Gilead (GILD) and United Therapeutics (UTHR) should benefit from the withdrawal of Thelin.

Neutral on Pfizer

We currently have a Neutral recommendation on Pfizer, which is supported by a Zacks #3 Rank (short-term “Hold” recommendation). While Wyeth brings with it an attractive biologics platform and some complementary products and businesses, we do not believe they are enough to sustain long-term top-line growth.

We see the merger as mostly an opportunity for Pfizer to cut additional costs. Longer-term growth will be dependent on the success of drug development. Pfizer's recent track record with pipeline development has been poor.

The Lipitor patent expiration in 2011 remains a big concern. Lipitor contributed almost 23% to the top-line in 2009 with sales coming in at $11.4 billion. The entry of generic versions of the product will have a significant impact on the company's financials. The loss of patent exclusivity over the coming years will make it challenging for the company to drive top-line growth.

 
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