Pfizer, Allergan say combined drug pipeline 'underappreciated'

Tue Jan 12, 2016 6:58pm EST
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By Ransdell Pierson

NEW YORK (Reuters) - The research chiefs of betrothed drugmakers Pfizer Inc (PFE.N: Quote) and Allergan (AGN.N: Quote) say the proposed combination of their experimental drugs deserves more credit, including potential blockbuster treatments for schizophrenia and depression.

Pfizer agreed in November to buy Botox-maker Allergan for $160 billion in a transaction meant to slash Pfizer's tax rate and achieve other cost savings. The tax-inversion deal would shift Pfizer's headquarters to Dublin and is slated to close in the second half of 2016.

Industry regulators and U.S. lawmakers have criticized the deal for its reliance on financial engineering. But more recently, company executives have said medical benefits of bringing together their drugs in development have been "underappreciated" and some healthcare analysts are making the case that combining the two research programs will yield sales and earnings ahead of Wall Street expectations.

"There has been a lot of attention on financial aspects of the deal, but there has been an underestimation of the Allergan pipeline," Pfizer research chief Mikael Dolsten told Reuters in a recent interview.

Dolsten told Reuters that Allergan's depression treatment rapastinel, which has shown promise of treating symptoms within hours rather than weeks required for standard treatments, could be "transformational" if it succeeds in late-stage trials.

Further studies of Vraylar, a treatment for schizophrenia and bipolar disorder approved in September, could show it has "unique" ability to treat negative symptoms of schizophrenia, such as social withdrawal and slowed movement, Dolsten said.

Relamorelin, potentially the first new treatment in decades for delayed emptying of food from the stomach, is another big opportunity, he said.

Allergan has predicted peak annual sales of up to $2 billion for rapastinel and up to $1 billion each for Vraylar, relamorelin, an experimental treatment for uterine fibroids called Esmya and Allergan's recently approved Viberzi treatment for irritable bowel syndrome.   Continued...

A company logo is seen through branches at a Pfizer office in Dublin, Ireland November 24, 2015.   REUTERS/Cathal McNaughton