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Coronavirus in China. Novel coronavirus (2019-nCoV), people in white medical face mask. Concept of coronavirus quarantine vector illustration. Seamless pattern.

Pfizer Inc. sees a long-term commercial opportunity for a COVID-19 vaccine, one that will change as the global health crisis moves beyond the pandemic phase. Much of the company's second quarter sales and earnings call on 28 July was dedicated to the high-profile vaccine, from the development timeline, potential safety and efficacy issues and ultimately, the commercial opportunity for Pfizer.

Pfizer, with partner BioNTech SE, is a frontrunner in the race to develop a vaccine against SARS-CoV-2, with the company targeting regulatory approval under an emergency use authorization in October. The companies announced the start of the Phase II/III trial on 27 July but pivoted to a second candidate, BNT162b2, from the closely related one they recently presented Phase I data on. (Also see "Coronavirus Update: Pfizer Switches To Alternate COVID Vaccine Over T Cell Response" - Scrip, 28 Jul, 2020.) The companies said BNT162b2 elicited better T-cell responses and could generate more consistent responses across diverse populations, including in older adults.

During the second quarter earnings call, worldwide president of R&D Mikael Dolsten said the majority of the 30,000-patient trial will be enrolled in August and that a filing could start as early as September, a stunningly fast development timeline for a vaccine if it is successful.

"Our assumptions were made a few weeks ago looking at incidence of disease in the US and elsewhere, and over the last few weeks, unfortunately, the incidence rate has made the disease even more prevalent," Dolsten said. "If anything, we would expect on that planning, to be able to hit the event rate sooner rather than later."

Under a recent supply contract with the US government, Pfizer will supply 100 million doses for $1.95bn, setting an implied price of $19.50 per dose or $39 for what is expected to be a two-dose regimen. (Also see "Pfizer’s US Contract Sets The Financial Bar For COVID-19 Vaccines" - Scrip, 22 Jul, 2020.) The contract suggests a profitable commercial endeavor for Pfizer and puts more focus on the long-term commercial opportunity for vaccine manufacturers – at least in the minds of investors.

The pandemic phase is expected to last through 2021 and potentially into the first part of 2022, with high volumes needed for mass vaccinations, biopharmaceuticals president Angela Hwang said.

"After that, the next phase is a phase where we think it will become more standard, more seasonal," she said. The second phase could require vaccinations for a number of years to maintain herd immunity globally, she predicted. "In this time period, we anticipate a return to more regular supply channels and a more value-based pricing approach."

Dolsten underscored that there remains a lot to learn about COVID-19, but that it will likely remain as a prominent virus circulating like the flu. Much also remains unknown about the various vaccines in development, including from developers Moderna, Inc.AstraZeneca PLC and Johnson & Johnson, and how long-lasting they are, which will impact the long-term potential as well. Nonetheless, Dolsten pointed out that Pfizer's platform could be directed to defend against future coronaviruses as well, not to mention other viruses.

"So, we see a very large opportunity based on the leadership we have with this mRNA platform, particularly by being able to engage both neutralizing antibodies and antiviral sedate cells," Dolsten said.

The price for the vaccine in the US appears set for the initial 100 million doses and an option to buy another 500 million doses, but the company has not disclosed the financial terms of agreements or ongoing discussions in Europe. Hwang said the company's pricing strategy for the vaccine is universal across the developed world but linked to volume as well.

"No country in the developed world will receive doses at a lower price than the US with similar volume commitments," she said.

Pfizer's CEO Albert Bourla also commented on President Trump's recent executive orders on drug pricing and called them a distraction for pharma from the current COVID-19 pandemic, which is what the industry should be focused on. (See sidebar.

Lyrica And COVID-19 Drag On The Top Line

If it is successful, a COVID-19 vaccine could represent unexpected upside to Pfizer's mid-term financial guidance. The company has previously guided investors to expect a compound annual growth rate of 6% through 2025 after it cycles through the loss of Lyrica to generics this year, though some analysts have been skeptical of the pipeline opportunities needed to get there. Pfizer said it expects to detail more of its pipeline to investors during a virtual investor event that will be held on 14 and 15 September.

The second quarter financial results reflect the last quarter of tough year-over-year comparisons due to the loss of Lyrica (pregabalin), which was Pfizer's top-selling drug before it went generic in 2019.

Pfizer's top-line CAGR forecast reflects a plan to spin out its Upjohn established products business into a new company with Mylan N.V. called Viatris.  (Also see "Upjohn/Mylan: Will "Potential Moderate Growth" Lure Investors?" - Scrip, 29 Jul, 2019.) That merger remains on track to close in the fourth quarter, Pfizer said. Upjohn sales declined 32% to $2bn in the second quarter.

Lower sales for the Upjohn established products business, driven by Lyrica and negative impacts from COVID-19-related stay-at-home orders, were a hit to Pfizer's top line in the second quarter. Revenues declined 11% to $11.8bn, but the results outpaced analyst expectations and biopharma sales were resilient, growing 4% to $9.8bn. Biopharma growth came even as COVID-19 resulted in an estimated unfavorable impact of approximately $500m in the quarter due to declines in patient visits in the US and lower demand for certain products in China.

Growth came from key products including Ibrance (palbociclib), Eliquis (apixaban), Xtandi (enzalutamide) and Vyndaqel/Vyndamax (tafamidis), which remains on track to become a blockbuster in its first full year on the market. The franchise, approved in 2019 for the treatment of transthyretin amyloid cardiomyopathy (ATTR-CM), generated revenues of $277m in the quarter – even as diagnosis of the rare disease remains low. Pfizer's disease-awareness initiatives have helped raise the diagnosis rate to 15% in the quarter from 1%-2% prior to the launch, CEO Albert Bourla said.

At the end of the second quarter, more than 15,000 patients in the US have been diagnosed, 10,000 patients have received a prescription and 6,200 patients have received the drug, he said.

Pfizer's biosimilars business has also been growing strongly, becoming a blockbuster business, powered by the launch of several oncology biosimilars. Biosimilars grew 33% in the quarter to $289m. US oncology biosimilar revenues grew 181% in the quarter, Pfizer reported, driven by strong demand for supportive care biosimilars: Retacrit (epoetin alfa-epbx) and Nivestym (filgrastim-asfi) and initial sales of Zierabev (bevacizumab-byzr), Ruxience (rituximab-pyyr) and Trazimera (trastuzumab-gyyp). SC141551

The company also disclosed that it no longer expects a US Food and Drug Administration advisory committee review for a pending BLA for tanezumab for osteoarthritis pain after previously alerting investors that it expected one. FDA's review is ongoing with action expected in December. Tanezumab is a first-in-class NGF inhibitor partnered with
Eli Lilly and Company and the class of drugs has been linked to some serious safety issues. (Also see "Surprise! Pfizer And Lilly File Tanezumab For Pain With FDA Despite Safety Questions " - Scrip, 28 Jan, 2020.)

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