Pfizer's Prevnar gets $2B boost with CDC nod in older adults

Let the uptake begin. Pfizer ($PFE) has snagged the Centers for Disease Control and Prevention (CDC) panel recommendation for Prevnar 13 it's been looking for--a nod for use in adults over the age of 65. And that should result in a sales lift that analysts say could touch $2 billion in peak additional sales potential--for now.

On Wednesday, the CDC's Advisory Committee on Immunization Practices (ACIP) voted 13-2, recommending Prevnar for elderly patients--even those who have previously received Merck's ($MRK) Pneumovax. Adults who have never had a pneumococcal shot should receive a dose of Prevnar followed by a dose of Merck's vaccine, it said.

"Rapid adoption--impacting the 2014/15 respiratory season--is expected," Leerink Partners analyst Seamus Fernandez wrote in a note to clients.

But echoing concerns it's raised in the past, the committee said the recommendation for routine use in seniors--if ultimately ratified by the CDC director--should be reevaluated come 2018. By then, herd immunity could be enough to protect older adults, it figures, estimating herd effects alone may be able to power an 86% reduction in preventable pneumonia by 2019.

That specification and ACIP's emphasis on the near-term value of universal Prevnar vaccination "drives our assumption that the estimated ~$2B in peak additional revenue potential will be limited to a 3-4 year period," Fernandez wrote.

CMS' accommodation of the recommendation and its final rule on coverage will also likely be important in determining the ultimate impact on vaccine sales for both Pfizer and Merck, he said. Prevnar will be immediately covered for adults who have not previously received a pneumococcal vaccine, but for those who have already taken Pneumovax, coverage may not come until early 2016, delaying some of Pfizer's revenues.

Still, it's a hefty boost for the Prevnar franchise, which already rakes in close to $4.5 billion in yearly sales. Right now, the Prevnar lineup is responsible for the only sales out of a vaccines unit Pfizer CEO Ian Read has long said he wants to expand.

That's about to change, however. The company currently has a candidate for the deadly meningitis B waiting for FDA approval, and earlier this month, it agreed to buy Baxter's marketed vaccines portfolio--consisting of products that protect against meningitis C and tick-borne encephalitis--for $635 million.

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