Pfizer's growth spurt

How Allergan would fit with Pfizer

Eighteen months ago, flat-to-flagging growth across Pfizer Inc.'s innovative and established products businesses suggested the pharma needed a major acquisition to shore up the units before it could move forward with a much-discussed potential breakup. But what a difference a year and a half makes.

As a result of bolt-on acquisitions, new approvals and pipeline progress, it now appears that Pfizer could be on track for a breakup with or without the object of its new M&A interest - Allergan plc.

That's a very different position than when Pfizer was courting AstraZeneca plc last year in a failed bid that appeared to be more about financial engineering than pipeline. While AZ products would have provided some small boost to Pfizer's growth trajectory, apart from a PD-L1 inhibitor there was limited fit in terms of therapeutic areas. AZ resisted the deal, which fell apart after the U.S. Treasury threatened to crack down on U.K. inversions.

Since then, on the established products side, Pfizer has bulked up through the September acquisition of Hospira Inc., which gave the pharma a trio of marketed biosimilars, nearly doubling its disclosed biosimilar portfolio to seven "distinct" candidates, and established the company as the largest global provider of sterile injectables.

On the innovative side, Pfizer has launched breast cancer drug Ibrance palbociclib, and revenue for its pneumococcal vaccine Prevnar 13 has increased thanks to an August 2014 recommendation by the CDC.

The progress is evident in Pfizer's top line, where the rate of decline for established products has slowed to 8% in 3Q15 from 14% in 2Q15, with the expectation that it will start to grow now that the Hospira deal is complete (see "Establishing the Business," page 2).

For the first nine months of 2015, the innovative business reported an 18% increase compared with the same period last year, driven in part by Ibrance and Prevnar.

Pfizer also found itself another PD-L1 inhibitor via a partnership with Merck KGaA and is now squarely in the cancer immunotherapy space, with three immunotherapies of its own in the clinic.

The pharma is also starting to see many of its rare diseases programs advance into Phase II and III. The result is three late-stage programs added via licensing deals and eight advanced from Phase I into late-stage development since last May (see "Pfizer's Pipeline Progress," page 4).

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