20 years after Viagra, Pfizer seeks another miracle drug

April 1, 2018 by Luc Olinga
The chances of another miracle drug may be waning for Pfizer, as the pharmaceutical giant constrains its research and development budget amid broader cost-cutting efforts

It has been 20 years since Viagra was introduced, and Pfizer is still searching for another drug with as much earning power as the revolutionary blue erection pill.

If anything, the chances for another miracle may be waning as the pharmaceutical giant constrains its research and development budget amid broader cost-cutting efforts.

Pfizer forecasts it will spend $7.4 to $7.9 billion this year on R&D, compared with $7.7 billion last year, according to projections released in February.

That is below the R&D of rivals such as Merck and Johnson & Johnson, which plan more than $10 billion in spending.

Pfizer's restraint means walking away from entire areas of medical research.

In January, the world's number two pharmaceutical company by sales ended its research programs into treatments for Alzheimer's and Parkinson's, cutting 300 jobs and saying it would reinvest the funds in other domains.

Pfizer also signaled it could sell its consumer healthcare business, which includes popular over-the-counter products such as the anti-inflammatory drug Advil, multivitamin Centrum and the ubiquitous ChapStick lip balm.

Sharing the risks

Pharmaceutical R&D is a tricky business in the United States, where there is extensive clinical testing and back-and-forth with the Food and Drug Administration before introducing a new drug.

Once launched, pharma companies also are under increased pressure to keep drug costs low following a number of controversies over runaway pill prices.

The cost of bringing a new drug to market requires an average of $2.6 billion, according to the Tufts Center for the Study of Drug Development.

That's a heavy investment considering that in the last 20 years there have been just 19 treatments that have generated at least $1 billion in annual revenue for their first five years, according to the QuintilesIMS Institute, a health care data and research company.

Against this backdrop, Pfizer has increasingly opted for a model where it shares the risks and benefits with other drug makers.

It has announced strategic partnerships with Merck and Bristol-Myers Squibb, while also collaborating with biotechs and university researchers in areas such as oncology and immunology.

Pfizer also finances some research through a venture capital-type unit, Pfizer Venture Investments.

Acquisitions

Pfizer has had other highly lucrative drugs besides Viagra, including the anti-cholesterol drug Lipitor, the anti-depressant Zoloft and the anti-inflammatory drug Celebrex.

The company said it is confident of future success.

"Our current pipeline is poised with an opportunity to deliver up to an additional 15 potential blockbusters over the next five years," a Pfizer spokesman said.

The spokesman noted that the company's R&D budget has been "very consistent" at around $7.65 billion the last three years.

But revenue dropped slightly last year to $52.5 billion. While the group expects sales to rise in 2018, at most it would go up just five percent, according to company projections.

Key challenges include the arrival of new generic products and the growth of the biosimilar market, which allows for substitutes to traditional drugs.

The arrival of biosimilars in Europe has cut into sales of the anti-inflammatory drug Enbrel and Viagra itself has seen revenue drop as generics have been launched in the US and Europe.

Wall Street analysts consider Pfizer a likely candidate for a mega merger. Pfizer's efforts at giant takeovers of AstraZeneca and Allergan may have fizzled, but it has bought smaller companies in the very recent past.

In 2016, Pfizer acquired Medivation and Anacor, which added to its portfolio Xtandi and Eucrisa, treatments for prostate cancer and eczema.

In 2015, Pfizer supplemented its own biosimilar business with the purchase of Hospira.

Explore further: Pfizer considers consumer business sale

Related Stories

Pfizer considers consumer business sale

October 10, 2017
Pfizer may be done selling ChapStick, Advil, Robitussin and other brands that people can buy without a prescription.

Key drug sales push Pfizer profit up 50 percent

August 1, 2017
Rising sales of most key drugs, lower one-time charges and reduced manufacturing costs helped drive Pfizer's second-quarter profit up 50 percent.

EU regulators clear Pfizer's purchase of Hospira

August 4, 2015
European Union regulators on Tuesday approved Pfizer's $15.23 billion purchase of injectable drug and infusion device maker Hospira.

Bigger Pharma: Allergan in merger talks with Pfizer

October 29, 2015
Botox-maker Allergan said Thursday it was in "friendly" merger talks with Pfizer that have the potential of forming a $300 billion pharmaceutical behemoth.

Pfizer buying Hospira for about $15.23 billion

February 5, 2015
(AP)—Pfizer is buying Hospira for approximately $15.23 billion, saying it is a good fit with its established global pharmaceutical business.

Pfizer says Hospira purchase will close in early September

August 24, 2015
Drugmaker Pfizer says it's received the final regulatory approvals for its $15.23 billion purchase of the injectable drug and infusion device maker Hospira, and says the deal will close in early September.

Recommended for you

Study: Ibuprofen, acetaminophen more effective than opioids in treating dental pain

April 17, 2018
Opioids are not among the most effective—or longest lasting—options available for relief from acute dental pain, a new examination of the results from more than 460 published studies has found.

Text messaging tool may help fight opioid epidemic

April 17, 2018
A new automated text messaging service may curb opioid abuse and reduce the likelihood of relapse while also decreasing treatment costs, according to researchers at Washington University School of Medicine and Epharmix, a ...

Marijuana-based drug gets positive review from US agency

April 17, 2018
A closely watched medicine made from the marijuana plant reduces seizures in children with severe forms of epilepsy and warrants approval in the United States, health officials said Tuesday.

Post-surgical opioids can, paradoxically, lead to chronic pain

April 16, 2018
Giving opioids to animals to quell pain after surgery prolongs pain for more than three weeks and primes specialized immune cells in the spinal cord to be more reactive to pain, according to a new study by the University ...

Animal study suggests common diabetes drug may also help with nicotine withdrawal

April 5, 2018
In a mouse study, a drug that has helped millions of people around the world manage their diabetes might also help people ready to kick their nicotine habits.

20 years after Viagra, Pfizer seeks another miracle drug

April 1, 2018
It has been 20 years since Viagra was introduced, and Pfizer is still searching for another drug with as much earning power as the revolutionary blue erection pill.

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.