Closing In on Year End and Reviewing Pfizer as an Investment

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Part 2
Closing In on Year End and Reviewing Pfizer as an Investment PART 2 OF 10

Treating Epilepsy Is One of Pfizer’s Solid Growth Prospects

Lyrica’s growth prospects

In the US, Pfizer (PFE)’s Lyrica is protected by its composition of matter patent until December 30, 2018. However, the drug lost regulatory exclusivity in major European markets in July 2014. Due to the varying statuses of patent protection across geographies, Pfizer has divided Lyrica’s total revenues across its two business segments, Pfizer Innovative Health (or IH) and Pfizer Essential Health (or EH).

Lyrica’s revenues from regions where patent protection has been lost is reported under the EH segment while revenues earned from patent-protected geographies are reported under the IH segment. To learn more about Pfizer’s new segments, please read A Look at Pfizer’s Innovative Health Business.

Treating Epilepsy Is One of Pfizer&#8217;s Solid Growth Prospects

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Wall Street analysts estimate that Lyrica’s sales in 2016 will reach ~$4.9 billion, which would be year-over-year (or YoY) growth of ~2.2%. In 2015, the drug accounted for 9.9% of Pfizer’s total revenues.

Lyrica has been a key revenue driver for Pfizer and has enabled the company to pose tough competition to peers such as Teva Pharmaceutical (TEVA) and Merck.

On October 13, 2016, the Court of Appeals in the United Kingdom declared that Actavis, now known as Allergan (AGN), did not infringed Lyrica’s patent related to general and neuropathic pain. In addition to Allergan, Generics (UK) Limited, which trades as Mylan (MYL) in the UK, had also challenged Lyrica’s pain patent.

If generic competition for Lyrica enters the market in the UL, it may have a negative impact on the share price of Pfizer as well as that of the SPDR S&P 500 ETF (SPY). Pfizer makes up about 1.1% of SPY’s total portfolio holdings.

Multiple indications

Lyrica is indicated for fibromyalgia, epilepsy, neuropathic pain resulting from spinal cord injury, diabetic peripheral neuropathy, and post-herpetic neuralgia. According to WebMD, “Fibromyalgia syndrome affects the muscles and soft tissue. Symptoms include chronic muscle pain, fatigue, sleep problems, and painful tender points or trigger points, which can be relieved through medications, lifestyle changes and stress management.”

WebMD descrives epilepsy as “a group of related disorders characterized by a tendency for recurrent seizures.”

WebMD adds, “Neuropathic pain is a complex, chronic pain state that usually is accompanied by tissue injury.” The medical site adds that diabetic peripheral neuropathy is “nerve damage caused by chronically high blood sugar and diabetes. It leads to numbness, loss of sensation, and sometimes pain in your feet, legs, or hands. It is the most common complication of diabetes.”

According to WebMD, “Postherpetic neuralgia…is a painful, chronic condition that can occur following shingles, a viral infection that causes a mildly itchy to intensely painful rash.”

In the next article, we’ll discuss the growth prospects of Eliquis in greater detail.


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