Cox-2's (and Pfizer?) on Slippery Slope

The FDA has just hammered Pfizer's Bextra and Celerex as well as other NSAIDs (see "FDA Announces Series of Changes to the Class of Marketed Non-Steroidal Anti-Inflammatory Drugs (NSAIDs); FDA Press Release).

FDA, which previously requested Pfizer to add a "black box warning" to Bextra's label (see "Bextra Label Updated with Boxed Warning Concerning Severe Skin Reactions and Warning Regarding Cardiovascular Risk"; FDA Talk Paper), now requests that Bextra be withdrawn from the market completely. FDA sad: "the overall risk versus benefit profile for the drug is unfavorable."

"FDA has also asked Pfizer to include a boxed warning in the Celebrex (celecoxib) label. Pfizer has agreed to suspend sales and marketing of Bextra in the U.S., pending further discussions with the agency. Pfizer has agreed to work with FDA on the boxed warning for Celebrex."

"In addition, FDA is asking the manufacturers of all OTC NSAIDs to revise their labels to include more specific information about the potential CV and GI risks, and information to assist consumers in the safe use of the drugs."

Slippery Slope
Celebrex is currently on a slippery slope to total withdrawal or at least very low market share. Take another look at the chart I published some time ago ("Vioxx Redux") and you will clearly see that Celebrex and Bextra have lost a lot of share of new prescriptions being written. Of course, Bextra will now have no new Rx's written and Celebrex is likely to continue its downward trend, despite what Pfizer and analysts had to say at the April 5th analysts' meeting with Pfizer:

"We believe with the continued development work, and continued clinical revelations, and appropriate labeling, these medicines will remain critical treatment options for many years to come." -- Thus spoke Karen Katen - Pfizer - Vice Chairman, President, Pfizer Human Health (See Final Transcript of Pfizer Analyst Meeting; Thomson StreetEvents).

Richard Evans, a drug-industry analyst with Sanford Bernstein, said, "the two things that concern me are the notion that Pfizer returns to growth in 2006 and 2007, and the extent to which that's predicated on Cox-2s growing." (see "Pfizer Plans a Revamp And $4 Billion in Cost Cuts," WSJ 4/6/2004). As far as growth goes, it doesn't look good for Celebrex.

I don't expect Pfizer to take this lying down. "Pfizer said it will explore options with the agency under which the company might be permitted to resume making Bextra available to physicians and patients." (see "Pfizer's Press Release In Response to the FDA"). They will be even more aggressive in defending Celebrex. "We are committed to conducting longer-term comparative benefit and risk studies," says Evans (see Transcript).

However, I still believe that Vioxx, Bextra, and Celebrex are all of the same kind of molecule and have very similar molecular structures. Given that, I believe they have similar positive and negative effects, despite what comparative benefit and risk studies may show. See "Cox-2's Die Hard: With a Vengeance," in which I predicted that Bextra and Celebrex would crash and burn. So far, I am batting .500!

Some might say that I am gloating, but I am not. I admire Pfizer and want it to succeed. I want it to succeed, however, by being what it and other big pharma companies claim to be -- innovative. To that end, Pfizer did announce an increase in its R&D budget. However it will also buy technology: "The company's sterling debt rating and cash pile mean 'we can afford to buy things that we want for our portfolio that others may be cautious about,' said David Shedlarz, a Pfizer vice chairman." (see "Pfizer Plans a Revamp And $4 Billion in Cost Cuts," WSJ).

Job Creation Not in the Cards
Ironically, a lot of Pfizer's "cash pile" is coming from "repatriating $28 billion in overseas profits this year under the American Jobs Creation Act. The legislation offers companies a one-time tax break, slashing the corporate rate on repatriated earnings to 5.25% from around 35%." Despite the name of this act, Pfizer is likely to cut jobs (at least by attrition) rather than create them.