Pfizer, Inc. PFE reportedly said in a statement that it will end R&D efforts in the Alzheimer’s and Parkinson’s disease areas, which will result in about 300 layoffs.
The decision to end the neuroscience-discovery program will mainly affect employees at facilities in Andover and Cambridge, MA, and Groton, CT. Pfizer, however, intends to continue development of pain candidate, tanezumab, which it is developing in late-stage studies in partnership with Eli Lilly LLY, label expansion efforts for pain drug Lyrica and its rare disease program.
Shares of Pfizer have risen 10.2% in the past year, comparing unfavorably with a 16.5% increase for the industry.
The successful development of therapies for the treatment of Alzheimer’s disease is challenging and we note that several companies have failed in this regard.
In fact Pfizer itself shelved its late-stage Alzheimer’s candidate, bapineuzumab IV after it failed two phase III studies. Pfizer was developing the candidate in collaboration with Johnson & Johnson JNJ and Elan Corporation.
In November 2016, Lilly’s anti-amyloid candidate solanezumab failed to meet the primary endpoint in a late-stage AD study. Lilly decided to drop the development of solanezumab. Lillyalso suffered a major setback in August 2010, when it had to halt the development of another phase III Alzheimer’s candidate, semagacestat.
Last month, Biogen, Inc. BIIB announced that an Alzheimer’s disease study on BAN2401 failed to show early positive which raised investor concern about the candidate’s chances of success.
Pfizer plans to use savings from the terminated programs to re-allocate spend on potentially more fruitful pipeline projects.
Pfizer expects approximately 25 to 30 drug approvals over the next five years, of which around 15 products have blockbuster potential. These include line-extensions for cancer drugs, Xtandi and Ibrance as well as rheumatoid arthritis drug, Xeljanz. Half of these potential blockbusters are expected to receive approval by 2020.
Pfizer carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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