A Fair Value Boost for Pfizer, Shares Attractive

Our peak tafamidis sales projections are based on strong efficacy, limited treatment options, and likely strong pricing power. The phase 3 data showed a 30% reduction in all-cause mortality, which should drive strong utilization of the drug and favorable reimbursement. While the prevalence of the disease is limited and estimated to be between 400,000 and 500,000 people (in developed markets, according to Pfizer), we believe the less than 1% diagnosis rate shows the likely difficulty in reaching these patients. However, without an approved drug for this patient population historically, we believe there was less motivation to diagnose the disease. Also, the more limited patient size combined with the strong efficacy should enable strong pricing of at least $150,000 annually even after accounting for value-based pricing, which rare-disease drugs have utilized. Overall, we project a 95% chance of approval based on the strong efficacy and benign side effect profile. Further, over the long term, we expect diagnosis rates to improve to 10% with tafamidis used in over a third of these patients.

While no other drug options are available for ATTR-CM, Alnylam's Onpattro is approved in another related rare disease, polyneuropathy of hereditary ATTR. The strong efficacy of Onpattro (50% decrease in all-cause hospitalization and mortality) may drive some off-label usage of the drug directly against tafamidis, but we expect this off-label competition to be limited.

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