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Can Pfizer (PFE) Bank on Bavencio for Long-Term Growth?

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The demand for checkpoint inhibitors, especially those targeting PD-1 and PD-L1, has risen significantly in the past couple of years. It is estimated that their market will rise tremendously in the next four to five years. PD-1 and PD-L1 are proteins present on the surface of cancer cells

With rising demand for these cancer therapies, Pfizer, Inc.’s (PFE - Free Report) Bavencio, also an anti-PD-1 antibody, can emerge as a significant top-line driver for this New York-based pharma giant in the long term.  Pfizer has developed Bavencio with its Germany-based partner Merck KGaA.

Pfizer’s shares have gained 18.7% so far this year, outperforming an increase of 6% for the industry.

 

 

Bavencio was approved for metastatic Merkel cell carcinoma in the United States, Europe and Japan in 2017. It received accelerated approval for second-line treatment of locally advanced or metastatic urothelial carcinoma, an aggressive disease with a high rate of recurrence,in the United States in May this year. Though Bavencio is a relatively new drug in Pfizer’s oncology portfolio, it is being considered a significant driver for the company in the long run.

Pfizer is focusing on continuously growing and expanding Bavencio into new indications and markets globally. Currently, Bavencio is being developed for more than 15 types of tumors including breast, gastric/gastro-esophageal junction, head and neck, Hodgkin’s lymphoma, melanoma, mesothelioma, Merkel cell carcinoma, non-small cell lung cancer, ovarian and urothelial carcinoma. These studies are part of the JAVELIN development program.

Pfizer is also conducting avelumab double/triple combination studies for chemotherapy and targeted therapies and has several avelumab combination therapies with immuno-oncology agents under development. In January, Pfizer had mentioned that within its immuno-oncology portfolio, the focus remains mainly on drug combinations of Bavencio with a variety of Pfizer-targeted agents.

Other PD-L1/PD-1 inhibitors on the market are Merck’s (MRK - Free Report) Keytruda, Bristol Myers’ (BMY - Free Report) Opdivo, Roche’s Tecentriq and AstraZeneca’s (AZN - Free Report) Imfinzi.

Merck is conducting numerous studies to evaluate its anti-PD-1 therapy, Keytruda for more than 30 types of cancer in more than 800 studies, including more than 400 combination studies. Keytruda is already approved for use in 12 indications across eight different tumor types in the United States.

AstraZeneca plc’s PD-L1 inhibitor drug Imfinzi (durvalumab) is being evaluated for multiple cancers (either alone or in combination with other regimens) and has bright long-term prospects.

Bristol-Myers’ PD-L1 inhibitor Opdivo is also approved in several countries including the United States, EU and Japan for several cancer indications. Several label expansion applications for Opdivo are under review in the United States and Europe.

Meanwhile, there are various PD-1 and PD-L1 inhibitors, which are still under development.

However, we believe that Bavencio can give these drugs a tough run as there is ample scope for growth in the space.

Pfizer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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