By Josh Nathan-Kazis

Pfizer's startling announcement late Wednesday that it would pull its pill for sickle-cell disease off pharmacy shelves is a blow to the drugmaker's efforts to buy its way through an impending avalanche of patent expirations.

The company said it was withdrawing Oxbryta, a daily pill for patients with sickle-cell disease, a serious, lifelong condition. It affects more than a hundred thousand people in the U.S., and millions more worldwide.

Pfizer said it had new data showing Oxbryta's benefits don't, in fact, outweigh its risks. The company didn't elaborate on the data, but alluded to results showing it may be associated with an increase in deaths and vaso-occlusive crises, painful episodes experienced by sickle-cell patients that can be life-threatening.

The new data had apparently already caught the eye of global regulators. European health officials had been planning to meet on Thursday morning to discuss what they had said was data showing "an imbalance of deaths between [Oxbryta] and placebo observed in clinical trials."

Pfizer has now stopped all clinical trials of Oxbryta and pulled the drug from all markets worldwide, but the company said the decision won't affect its financial forecasts for 2024. The stock was down just 0.4% on Thursday.

New gene therapies for sickle cell, one developed by Bluebird Bio and the other a collaboration between Vertex Pharmaceuticals and Crispr Therapeutics, have drawn significant attention in recent months as a potential cure. The Pfizer drug was slightly older, and has been on the market since 2021.

The withdrawal represents a disappointing coda to Pfizer's $5.4 billion acquisition of a company called Global Blood Therapeutics in mid-2022 That purchase was part of a flurry of deals that Pfizer pursued as it sought to use the windfall of cash earned from its Covid-19 vaccine to produce long-term revenue.

At the time, Pfizer said it expected Global Blood Therapeutics' products and pipeline to eventually bring in sales of $3 billion a year for Pfizer. In a presentation that December, Pfizer seemed to increase that projection. It said that two assets in the Global Blood Therapeutics drug-development pipeline, GBT-601 and inclacumab, had more than $3 billion in potential peak annual revenue, a figure that didn't seem to include Oxbryta sales.

Those hopes now seem to be fading.

Oxbryta, which analysts had projected clocking sales of $711 million in 2029, according to FactSet, is now headed for the trash bin. GBT-601 works similarly to Oxbryta, and analysts wrote late Wednesday that investors may have questions about its future. Leerink Partners analyst David Risinger noted that the estimated completion date for a Pfizer trial of GBT-601 was recently pushed back by two years.

Pfizer's strategy in the wake of the Covid-19 pandemic was to use the tens of billions in cash it reaped through sales of its vaccine and antiviral to make acquisitions.

The company spelled out very clearly for investors how those acquisitions would help it more than make up for the $17 billion in annual revenue it would lose to patent expirations through 2030. In a presentation in 2022, Pfizer listed Oxbryta and GBT-601 as among a group of drugs acquired through dealmaking that would together bring in "at least $25B" in 2030 revenue.

Other drugs in that group included medicines acquired through the company's 2022 acquisition of Biohaven Pharmaceuticals and its purchase of Arena Pharmaceuticals in late 2021.

Investors never really liked the strategy, however. Pfizer shares are down roughly 50% from their peak in late 2021, and have fallen 32% over the past two years. Wednesday's announcement highlights part of the problem: The drug business is unpredictable, and investors weren't ready to rely on Pfizer's projections.

It "does reinforce the idea that PFE's aggressive M&A strategy including its CEO actually guiding to an inorganic revenue figure in dollars was and is a bit cavalier especially in the context of an industry fraught with clinical and commercial setbacks," Mizuho healthcare equity strategist Jared Holz wrote in an email to investors early Thursday.

Investors seemed to see some opportunity for other drugmakers in Pfizer's failure on Thursday morning. Shares of Agios Pharmaceuticals, which is testing a drug called mitapivat in sickle-cell disease, were up 8%.

Leerink's Risiner wrote that the implications of Oxbryta being pulled from the market for gene therapy companies pursuing sickle cell were limited because the patients on Oxbryta are generally not in the target population for gene therapies.

Leerink said the withdrawal could be helpful, on the other hand, for Fulcrum Therapeutics, which was up 20% Thursday. Fulcrum has been struggling to recruit patients for a trial of an experimental sickle-cell drug, pociredir, and Oxbryta's removal from the market could help move the trial toward completion, he said.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

September 26, 2024 11:45 ET (15:45 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.