Pfizer's potential stars Eliquis, Xeljanz see sluggish sales

Pfizer ($PFE) believes it has a winner with Eliquis. It has the right market niche, a replacement for blood thinner warfarin, and the clinical data that should make it a star. What it hasn't had so far is a fast start toward bigtime sales.

In fact, Pfizer executive Geno Germano conceded during an investment conference that neither it nor another blockbuster hopeful, rheumatoid arthritis med Xeljanz, have so far lived up to expectations. At one point, analysts predicted Eliquis, which was approved in the U.S. in December, to hit peak sales of more than $3 billion annually, and some said as much as $5 billion. Right now, Bloomberg says analysts are pegging sales at $615 million in 2016. Earlier projections forecast peak annual sales of $3 billion for Xeljanz as well, but analysts are saying it may hit about half that--$1.6 billion by 2016.

There have been some unexpected bumps for both drugs, which Pfizer has been counting on to help fill the gaping sales hole left by the patent loss of Lipitor. Germano, who leads the specialty drugs and oncology businesses for Pfizer, said being late to market with Eliquis has allowed some competitors to get entrenched. "I think some of the low-hanging fruit has been taken by the entries that came before Eliquis," he said. Eliquis came in after Boehringer Ingelheim had already gotten approval for its warfarin replacement Pradaxa, as well as behind Xarelto from Bayer AG and Johnson & Johnson ($JNJ). Doctors and patients have gotten comfortable with those meds, making it harder for Eliquis to break in. Pfizer shares marketing of the drug with Bristol-Myers Squibb ($BMY).

In the rheumatoid arthritis category, Xeljanz has had to go up against AbbVie' ($ABBV) Humira, which took over Lipitor's spot as the world's best-selling drug. Xeljanz is approved for treatment when RA patients fail to respond to a first-line treatment, usually the generic drug methotrexate. About half those taking the Pfizer drug fall into that category, while the the rest were put on it when they quit responding to Humira. Again, Germano said that getting doctors to switch their patients can be a tough sale.

Complicating the future sales of Xeljanz could be a study that came out this week that indicates a drug cocktail of methotrexate and two other generics was much cheaper and worked as well as Amgen's ($AMGN) Enbrel, another competitor in the category. The study by the Department of Veterans Affairs suggested doctors should try the "triple therapy" if methotrexate fails before moving to biologics. Xeljanz is a pill, not an injectable biologic, but it still comes at a high price--about $25,000 a year, compared to $1,000 for the cocktail.

Pfizer badly needs these drugs to hit their potential. The patent loss of Lipitor has been so hard on the drugmaker it led CEO Ian Read to downsize the company dramatically with layoffs and spinoffs. By itself, the cholesterol drug last year lost 59% of its worldwide sales--and 81% in the U.S. From $9.577 billion in 2011, Lipitor faded to $3.948 billion in 2012. Overall, pharma sales dropped 8.8%. To respond, Read sold Pfizer's nutrition business to Nestlé for $11.85 billion and spun off a portion of the company's animal health business.

- read the Bloomberg story