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Stock Research – Pfizer blows up its own Pipeline with Torcetrapib withdrawal
Stock research we call it. You want to talk about stock research. Let’s talk about how Pfizer the world renowned drug company blew itself up over the weekend. We all know that the classes of drugs, known as the STATINS have meant billions to the bottom line of the major pharmaceutical drug companies. Remember we said billions to the bottom line, not just sales. Nothing is more profitable than a blockbuster drug to the bottom line. It’s like printing money at the US Treasury, maybe better.
For years Pfizer made billions off of Lipitor, which is a STATIN drug that lowers LDL bad Cholesterol. It works like this. We all eat crap loaded down with the wrong stuff. Let’s admit it, we love it. We’re overweight as a nation, and we don’t like string beans and asparagus. We like pizza, and Big Macs, and don’t forget the French fries. By the way, do you know the number one selling vegetable in the world is the potato, because you can make French fries out of them? What’s number two you ask? It’s the tomato, because you make ketchup out of them and enrich John Kerry’s wife, every time you buy a bottle.
If we like to eat this stuff and we do, what happens is that somewhere in your 50’s and 60’s, you start taking a statin drug like Pfizer’s Lipitor to knock down your LDL (BAD) Cholesterol. The LDL brings the bad stuff to the heart. Lipitor acts on the LDL Cholesterol that’s manufactured by your body independent of your food supply. Your body manufacturers between 75%, and 80% of the LDL BAD Cholesterol that is in your body. This is why Lipitor is such a miracle drug.
Your body also has HDL GOOD Cholesterol which acts as a vacuum cleaner to remove the LDL BAD Cholesterol from the body. The more HDL good stuff you have, the better off you are. Here’s the problem. It’s very tough to increase your HDL levels in your body. There’s niacin which is really a vitamin. There are certain foods that do it. There’s also exercise, and losing weight (sure).
Pfizer put 0 million dollars into developing an HDL enhancing drug called Torcetrapib. They’ve been at this since 1999. The drug was in late stage clinical trials. They had 15,000 people in the trial which is composed of two groups. One group gets the drug. The second group gets a harmless placebo which looks, and feels just like the real drug. The doctors and researchers administering the trial are clueless as to which group you happen to be in because that could lead to investigator BIAS. You might take better care of the people receiving the real drug as opposed to the so called sugar pill. The trail went on for years as these trials normally do.
Now here’s the deal. When you do a clinical trial, there’s always an ethics panel supervising the process. These are independent doctors and scientists who are there to make sure everything is kosher for want of a better word. As an example, only the ethics committee knows who’s getting the real pills and who’s getting the placebos.
The ethics committee knows how the trial is progressing do to the interim reports that shows who’s living and who’s dying. For years it was only men being tested. Only recently did the government force the addition of WOMEN to clinical trial by threatening to withdraw financial support. The arrogant researchers felt that women were nothing more than LITTLE MEN. We now know this to be untrue. Hell, I knew it was untrue back then.
The ethics committee is empowered to INTERVENE in a clinical trial for a number of reasons; one of these is a good reason. Years ago, there was a trial to determine if a person who had a heart attack would benefit from using aspirin on a daily basis. Two years into the trial, it became obvious to the ethics committee that aspirin was saving peoples lives. The committee felt it would be ethically improper to withhold this information from the medical community until the end of the trial, another two years. They broke protocol and doctors began having their patients take aspirin immediately.
Sometimes the ethics committee intervenes when things are going wrong. Things certainly went wrong over the weekend for Pfizer, and its HDL GOOD Cholesterol enhancing drug Torcetrapib. The ethics committee notified two Pfizer senior people on Saturday morning that the trial results showed that 82 patients taking the new drug had died over the life of the trial, versus 51 who were taking Lipitor alone. Torcetrapib was supposed to be combined with Lipitor and sold as a combination drug to both lower LDL BAD Cholesterol, and increase HDL GOOD Cholesterol.
Something had gone wrong, and people taking the new drug had died at a disproportionate rate compared to people taking Lipitor alone. The Ethics committee advised immediately stopping the clinical trial, and that’s what Pfizer did. Eight hundred million dollars down the drain, as well as a vital part of Pfizer’s drug pipeline for late 2007 on.
What we don’t know, and won’t for a while is what is the problem with Torcetrapib. Is it the drug itself, or is it the mechanism by which the drug operates. In other words is the problem the whole class of potential drugs of which Torcetrapib is just the one being tested right now, or is it JUST Torcetrapib. We don’t know, but we will find out.
People desperately need a drug to increase their HDL good Cholesterol. Had Torcetrapib worked, it would have changed the entire heart disease industry, and it is an industry folks. With the exception of the heart scan machine which has the potential of rocking the heart disease world, we have not had a major change in heart care in over ten years. Torcetrapib would have changed that. With Pfizer’s capacity to advertise, and a world-class sales team beating down the doors of doctors who welcome them because they bring FOOD with them, this drug would have meant billions upon billions of dollars of sales, most of it going right down to pre-tax net.
Well such is not the case. It’s not every day, you think you have Fort Knox and it turns out there’s lead in those vaults. I am sure that the Chairman of Pfizer, who is a lawyer and therefore doesn’t know a thing about making drugs, will still have a nice Christmas. This will never touch him. For the rest of us, there’s still HDL Milano which will revolutionize heart disease when that hits the market, but that my friends is another article, and years away. If you have an interest in knowing more about heart disease, drop me an e-mail at firstname.lastname@example.org, and in the next week, we’ll put something together for you that you will love. Just tell us where you read this article.
Value Investing at StocksAtBottom.com
About the Author: Richard Stoyeck’s background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and StocksAtBottom.com