One analyst isn’t sure Pfizer can afford to be behind in both immuno-oncology and Alzheimer’s. And while his peers have suggested bulking up in I-O to solve that issue, he has a different idea.
BMO’s Alex Arfaei sees “strong strategic rationale” for a merger between Pfizer and neuro specialist Bioegen, he wrote in a Monday note to clients, arguing that a tie-up between the two would make “more sense” than a Pfizer buy of I-O hotshot Bristol-Myers Squibb that’s been rumored for months.
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The reason? The New York drugmaker “cannot afford to remain on the sidelines in Alzheimer’s,” with fellow pharma giants Biogen, Merck, AstraZeneca and Lilly gearing up for readouts of pivotal trials over the next few years, he wrote. Plus, Pfizer will have “a significant gap” in the neurology field once seizure and nerve pain drug Lyrica loses exclusivity.
And as for the rest of Biogen’s portfolio? “Pfizer can probably manage Biogen’s neurology franchise more efficiently, and capture significant operating synergies by leveraging Lyrica’s infrastructure,” Arfaei figures.
The Alzheimer’s assertion may seem like an odd once, considering that the malady has so far largely confounded drugmakers. But it’ll be a big opportunity for the company that finally cracks the code, and Arfaei posits that with candidate aducanumab, Biogen could be that drugmaker.
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“There are signs of significant progress, the strongest of which, in our view, is ... aducanumab,” he wrote, adding that “we believe the next wave of Alzheimer’s trials have a higher probability of success because they are in earlier stages of disease with better patient selection.”
Arfaei certainly isn’t the only analyst out there who thinks Pfizer may be gearing up for a deal. Industry watchers have kept a close eye on the company ever since its Allergan megamerger fell through, and it’s no secret that U.S. tax reform could bring the company a boatload of dealmaking cash.
So far, though, rumors have largely centered on Pfizer’s I-O rivals—particularly Bristol, which could vault the company toward the front of the pack when it comes to PD-1/PD-L1 assets. But questions are still swirling around BMS’ Opdivo-Yervoy approach in the all-important lung cancer space, and that “significant uncertainty” makes the New Jersey company an inferior pick, in Arfaei’s opinion.