Shares of Pfizer Inc. dropped by 2 percent after removing its cholesterol fighting drug from its profile as large clinical trials proved the incremental ineffectiveness of the drug, pushing the company to lower its 2016 earnings guidance.
The U.S. drug conglomerate trimmed its profit forecast for the year on Tuesday because of the removal of its experimental injectable anti-cholesterol medicine, bococizumab, that works by blocking the protein called PCSK9 to help heart patients.
According to Pfizer, bococizumab gradually lost its effectiveness in combating “bad” LDL cholesterol. In addition, the drug was also causing patients irritation where the drug was being injected on the skin that was worse than recently approved drugs.
Two rival drugs, Repatha, from Amgen Inc and Praluent, from Regeneron Pharmaceuticals Inc and Sanofi SA, have recently been approved by U.S. drug regulators since last year. Both drugs were able to cut LDL cholesterol by about 60 percent, which is more effective than Lipitor from Pfizer.
According to Pfizer Chief Executive Ian Read, the effectiveness of the experimental drug dropped for a significant amount of patients after using it for 52 weeks after its “robust” effectiveness in the first 12 weeks and the succeeding 24 weeks.
“The product looked great until we got the 52-week data,” Read said. He added that the company will have no plans to pursue the research and development of another PCSK9 inhibitor.
Ashtyn Evans, analyst for Edward Jones said that annual sales of bococizumab were expected to be at $500 million by the year 2020, but became a disappointment as the costly Phase III studies showed the problem with the drug.
The company’s stock price, which is 12 times the expected earnings per share for 2017, was behind in the drug industry as it was currently unable to bring new products that it needed. It closed at $31.07 on Wall Street down by 64 cents.
Amgen is set to report on the ability of their drug, Repatha in terms of reducing plaque build-up in the artery at the annual Scientific Sessions by the American Heart Association at New Orleans. According to the company, they have succeeded and they will be showing ultrasound images inside the arteries as their measure of success.
The Medicines Co’s PCSK9 program benefitted from Pfizer’s pullout. “There is one fewer competitor and any big biopharma looking for an LDL cholesterol lowering program should want MDCO’s PCSK9si,” according to RBC Capital Markets analyst Adnan Butt.
The drug is currently in the third phase of testing and is working in a different way from the current drugs by Amgen and Regeneron.
An important drug that Pfizer has newly rolled out is Ibrance—a breast cancer treatment that brought in $550 million in revenues.
Pfizer was forced to reduce its lower full-year revenue forecast to $52 billion from its previous expectation of $51 billion, but kept its upper end at $53 billion.