Is Pfizer a Good Bet in Biotech?

Brittney Barrett  |

The recent pullbacks have seen investors abandoning biotechs in droves. The dual risk of a weak market and a share price often dependent on the result of unpredictable tests and trials proved too perilous an investment amid the ongoing volatility. With volatility becoming the new gold standard, however, and several biotech opportunities presenting themselves at attractive prices, the time may be now to re-engage in the sector. There are a number of promising chemical makers calling for attention right now but one old stand-by is looking especially attractive with a strong pipe-line and a mid-level share price.

Pfizer (PFE) has been laboring for sometime on a rheumatoid arthritis drug, designed to serve a $22 billion market. Granted, many biotech companies have offerings in the works for huge markets but rumor has it that Tofacitinib has what it takes to be hugely popular.

Barron’s recently investigated the results from the American College of Rheumatology 2011 meeting abstracts and came to the conclusion that the drug could far exceed even the impressive sales estimated of $2.6 billion.

Treating rheumatoid arthritis is typically associated with the use of injectible rather than oral pharmaceuticals. Pfizer’s current drug has seen results comparable to those injectibles currently available on the market but is in an oral form.

Few patients would willingly administer and injection when given the choice of an oral pill, and with so far somewhat minimal side effects, that number will continue to dwindle. Pfizer awaits 12-month results before a full assessment of the drug can be made but so far things look promising for the company.

Among the drugs it has been compared to Humira, which is also designed to treat rheumatoid arthritis and is anticipated to bring in $8.5 billion by 2013. If Pfizer were to add a powerhouse seller in line with that to its offerings it would help shares enormously.

The company is looking to file in the U.S., EU and Japan by the end of 2011. The impact to the share prices may be so going, but it could be worth the wait if Pfizer’s 12- month results are in-line with current expectations.

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