EU Label Expansion for Sutent - Analyst Blog

Pfizer Inc. (PFE) recently announced that it received approval from the European Commission for an additional indication for cancer drug Sutent. Sutent gained approval for the treatment of unresectable or metastatic, well-differentiated pancreatic neuroendocrine tumors (NET) with disease progression in adults.

Approval for the additional indication was based on data from a randomized phase III study which showed that patients in the Sutent arm were free from disease progression or death for 11.4 months, compared to 5.5 months in the placebo arm.

Pancreatic NET is a rare cancer, which is estimated to impact about two to four people in a million annually. Being the first treatment to be approved for pancreatic NET in twenty-five years, Sutent should be able to carve a position for itself in this patient population.

Sutent is currently approved for the treatment of gastrointestinal stromal tumors (GIST) and metastatic renal cell carcinoma (RCC). The drug has experienced very strong uptake, ending 2009 with revenues up 14% at $964 million.

Pfizer Pursuing Additional Indications for Sutent

Pfizer has been consistently working on getting Sutent approved for additional indications. However, the company faced several setbacks in its attempts to expand Sutent's label. 

In late Sep 2010, Pfizer discontinued a phase III study (SUN 1120) that was evaluating Sutent, in combination with prednisone, in men suffering from advanced castration-resistant prostate cancer (CRPC) which had progressed even after being treated with a docetaxel-based chemotherapy regimen.

Earlier in August, Pfizer had announced disappointing results on the candidate from a late-stage study that was being conducted in patients suffering from non small-cell lung cancer (NSCLC).

Then in April 2010, Pfizer had to discontinue a phase III liver cancer study. The trial was halted based on a review conducted by an independent data monitoring committee which said that a higher number of serious adverse events were observed in the Sutent arm compared to Onyx/Bayer's (ONXX/BAYRY) Nexavar (sorafenib). Moreover, Sutent failed to demonstrate superiority or non-inferiority to Nexavar.

In March 2010, Pfizer had reported disappointing results from two phase III studies of Sutent in advanced breast cancer.

Pfizer is currently evaluating Sutent for renal cell carcinoma (as adjuvant therapy). Approval for additional indications would help boost Sutent revenues significantly.

Neutral on Pfizer

We currently have a Neutral recommendation on Pfizer, which is supported by a Zacks #3 Rank (short-term Hold rating). We expect near-term earnings growth at Pfizer to come in the form of cost-cutting and share repurchases.

While the merger with Wyeth provides Pfizer with an attractive biologics platform and some complementary products and businesses, we do not believe they are enough to sustain long-term top line growth. Longer-term growth will depend on the success of drug development. The patent expiration of cholesterol therapy Lipitor in 2011 remains a big concern.