Pfizer's Chantix Gets Black Box

Pfizer’s Chantix to Carry a Black Box Warning

On July 1, 2009, Pfizer, Inc. (PFE) announced that it has added a "black box" warning to its label for smoking cessation drug, Chantix. The black box warning highlights safety information about reports of serious neuropsychiatric events, neuropsychiatric symptoms and suicidality. The FDA recommended a similar warning for GlaxoSmithKline’s (GSK) anti-smoking drug, Zyban.

Physicians prescribing Chantix and Zyban have been asked to monitor their patients for any unusual changes in mood or behavior after starting these drugs. The FDA has also asked the companies to conduct additional studies to determine the extent of the side effects.

The black box warning, which is the FDA’s strongest safety warning, is based on a review of reports submitted to the agency’s Adverse Event Reporting System since the time the products were marketed and on an analysis of information from clinical trials and scientific literature.

Although a major blow for Pfizer, the black box label for Chantix does not come as a big surprise. Chantix has been in the news since late 2007, when the drug was associated with neuropsychiatric symptoms like suicidal thoughts and aggressive and erratic behavior.

Though Pfizer had updated its label based on post-marketing reports which showed a potential relationship between Chantix use and neuropsychiatric symptoms, the FDA issued a Public Health Advisory in early February 2008 stating that it appears increasingly likely that there may be an association between Chantix and serious neuropsychiatric symptoms.

With Chantix being associated with major safety concerns, sales declined 4% year-over-year in 2008. Now that the Chantix label includes a black box warning, we expect Chantix sales to decline significantly going forward.

We maintain our Hold rating on Pfizer with a $16 target price. Our recommendation is based on our concern that Wyeth (WYE) will not provide enough opportunity to grow revenues in the long term. Additionally, we are concerned about the significant reduction in the company’s net cash balance and the lower than expected financial guidance for 2009.

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