Will Pfizer Unveil A Breast Cancer Blockbuster This Sunday?

A decade ago, Pfizer PFE +0.34%, then the world’s largest drug company, sold three of the 10 biggest-grossing medicines in the United States. Now, it doesn’t boast one. Wall Street analysts think a study of a breast cancer medicine being presented at a medical meeting in San Diego on Sunday could give the drug giant its best chance of changing that fact.

Pfizer announced on February 3 that the medicine, palbociclib, had demonstrated a “statistically significant and clinically meaningful improvement in progression-free survival (PFS)” for women with a certain type of advance breast cancer in a mid-stage, or phase II, study. Mace Rothenberg, a Pfizer senior vice president in charge of testing oncology drugs, said in a press release that the company was “delighted with the final data.”

That press release has Wall Street analysts hoping that Pfizer could file with the Food and Drug Administration to have the drug approved based on this study, widening the company’s lead on a similar compound from Novartis NVS -1.37% that is in the third and final stage of drug testing. And the opportunity is huge, with some analysts saying sales could eventually be as high as $10 billion. That means cancer researchers should expect a flood of Wall Streeters in dark suits at the annual meeting of the American Association for Cancer Research, which I’ll be attending.

The study is a randomized controlled trial, the gold standard in medicine, comparing the combination of palbociclib and letrazole, a drug that blocks the production of estrogen, which can cause some breast cancer tumors to grow. The market it’s addressing, for advanced breast cancer that is positive for an estrogen receptor and negative for the Her2 receptor that leads tumors to respond to Roche’s Herceptin is a big one: about 75% of breast cancers are estrogen receptor positive. But this study is small, containing only 177 patients.

Christopher Schott, the pharmaceuticals analyst at J.P. Morgan , wrote that the initial advanced breast cancer market along could be worth $5 billion in annual sales, with revenues reaching $10 billion if further studies prove that palbociclib also works for women undergoing adjuvant treatment, that is, those being treated to make sure cancer doesn’t come back.

Other analysts have tossed out similarly high market opportunity forecasts. Mark Schoenebaum at ISI Group has tossed out a $9 billion number. Timothy Anderson at Bernstein Research warns “expectations are already high,” though he is bullish on the stock.

The big question this weekend will be how big the benefit seen in this 177 patient study will be. The main measure of success in the study is progression free survival (PFS), a measure of how fast tumors are growing. According to Schott, in an interim look it took patients on palbociclib 26.1 months to progress, compared to just 7.5 months for those on the placebo group. Using a different measure, Vamil Divan at Credit Suisse hopes the data release will show that patients will have half the risk of progressing if they took palbociclib, written as a “hazard ratio” of 0.5.

But what investors will really want to know is whether patients lived longer on palbociclib, even if that result is not statistically significant. Schott says that he thinks that the result should be enough for at least some trend toward there being fewer deaths in the palbociclib group. Divan says that investors should look for a hazard ratio on survival of 0.8 or less; that would mean that getting palbociclib would mean an advanced breast cancer patient would have a 20% reduction in her risk of death. Roche’s Avastin, one of the world’s best-selling drugs, had its approval in breast cancer revoked by the FDA because it had no effect on survival.

Most analysts believe Pfizer will file for FDA approval for palbociclib in 2015 or 2016; if the data are strong enough for Pfizer to gain approval early that could lead to material upside to earnings. By the same token, if the drug does not seem to be helping patients live longer, that could depress the stock. The other two big issues for Pfizer investors are whether the Centers for Disease Control and Prevention recommend its pneumonia vaccine for adults over 65, and the expected breakup of the company into several parts. This quarter, Pfizer will release separate financial data for its divisions for the first time in expectation of a breakup.

Early-stage results from a similar Eli Lilly drug are also expected at the AACR meeting.