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Pfizer: A Stealth Blockbuster in Heart Drugs?

11/18/2019 5:00 am EST


Joe Duarte

Editor, Joe Duarte In the Money Options

Pharmaceutical stocks have been beyond wallflowers in 2019. In fact, some of them, like drug giant Pfizer (PFE) have been right down in the fallen angel category until recently, observes growth stock expert Joe Duarte, editor of In the Money Options.

Pfizer’s stock blues have come due to the loss of its patent exclusivity on nerve pain leader Lyrica and head-scratching among investors due to management’s decision to put a new long acting opioid just as the government was rolling out its opioid crisis mantra.

Still, if you look at stock charts, it’s hard to ignore that money has been moving into the shares of late; and perhaps with good reason. That’s because deep inside the archives of Pfizer’s drug portfolio is a new medication called Vyndagel, which treats a frequently undiagnosed form of congestive heart failure known as ATTR.

Without getting into the medical weeds, just know that ATTR is a condition in which a protein builds up in the heart muscle resulting in the stiffening of the muscle wall, which eventually loses its ability to contract and pump blood thus leading to heart failure.

Unfortunately ATTR is a little known entity, thus it is often confused with other forms of heart failure and in many cases is left untreated until it becomes an advanced condition. In comes Vyndagel which improves the situation, if the doctor can figure out that it’s the cause. But here’s where PFE may have something.

The company is educating cardiologists on the condition and how to look for it, inexpensively by the use of a specialized non-invasive radiological test which is also used to diagnose bone conditions.

Now if we take the analysis further, data shows that 40% of patients with carpal tunnel syndrome (pain and numbness in the hands) can develop ATTR, although it is still very early in making sense of this data and there is no way to know how it will pan out.

Nevertheless, if you extrapolate these numbers based on current data, they suggest that there may be as many as 10 million people who may be at risk for ATTR in the U.S. alone.

Further — and this is where it gets interesting — since Vyndagel is helping people who would potentially end up in the hospital with major heart problems, insurers are actually starting to pay for the medication in more cases than expected.

As a result, Pfizer’s sales of the drug are well above expectations and are expected to ramp up as more doctors start to diagnose the condition.

Furthermore, despite management’s past efforts and blunders, PFE is starting to see benefits from their established drugs in oncology, as well as blood therapies (Eliquis) and their rheumatoid arthritis franchise (Xeljans).

Moreover, they are making inroads in biosimilar drugs, getting close to FDA approval for a long acting growth hormone replacement drug and have recently closed a set of pipeline packing biotech acquisitions after their recent jettisoning of their consumer division.

Thus, as hard as it may seem, Pfizer may be turning the corner, and for investors with a longer time frame, it may be worth considering nibbling at the shares.

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