FDA experts support Pfizer's AIDS drug

NEW YORK (CNNMoney.com) -- FDA advisers on Tuesday unanimously supported the speedy approval of an experimental HIV anti-viral from Pfizer.

If it's approved for the U.S. market, maraviroc could be the first in a whole new class of AIDS drugs. Maraviroc could also improve the company's reputation as a producer of badly needed new drugs. But it won't be a big earner, analysts say.

A 12-member panel of experts for the Food and Drug Administration voted in favor of accelerated approval for the Pfizer (Charts, Fortune 500) drug. The panel vote is nonbinding but will be considered as advice by FDA regulators, when they decide at a later date whether to approve the drug.

Barbara Ryan, analyst for Deutsche Bank North America, projects that maraviroc's annual sales will peak at $500 million by 2011, far less than the billion-dollar blockbuster levels that investors want to see. Les Funtleyder, analyst for Miller Tabak, forecast peak annual sales even lower, at $200 million, though he said the pill won't have trouble getting past the FDA.

The drug has already been approved for the FDA's streamlined "fast track" review process and, more importantly, it would be the first member of a new class of AIDS drugs that prevent the virus from spreading throughout the body. Big Pharma is often criticized for producing "me-toos," or drugs that aren't really needed because they are similar to existing therapies.

Maraviroc is a potential life-prolonging drug for patients with AIDS. AIDS is an area where new drugs are in high demand because the virus constantly mutates, and because AIDS patients often develop resistance to older drugs, rendering existing therapies obsolete.

About half a million AIDS patients live in the U.S., according to estimates from the Centers for Disease Control and Prevention. But not all of them would be eligible for maraviroc, which only works for a genetic sub-set of AIDS patients. Dr. Jacob Lalezari, a researcher at Mount Zion at the University of California, San Francisco who headed the maraviroc study, said the drug could be effective in 80 percent of early-stage AIDS patients, and 50 percent of late-stage patients.

Maraviroc not only has a limited customer-base, but the drug could also run into some competition from Merck (Charts, Fortune 500) this year, said Ryan of Deutsche Bank.

Merck & Co., Inc. is experimenting with another HIV anti-viral pill, known as MK-0518, or raltegravir. If the FDA approves this drug, Merck plans to give it the market name of isentress. Maraviroc and isentress are different drug compounds that would work in similar ways -- to block a mechanism that the AIDS virus uses to replicate.

Ryan of Deutsche Bank North America said the Merck drug is a potential $1 billion-a-year blockbuster. If isentress gets approved by the FDA, it would not be limited to a genetic subset of AIDS patients like the Pfizer drug, giving it greater sales potential, said Ryan.

Pfizer's drug is ahead of Merck's drug in the regulatory process. Merck plans to file isentress to the FDA this summer, said Ryan. The drug is a strong candidate for the fast-track review process, which generally takes six months. So if isentress is approved, it could enter the U.S. market by year's end, said Ryan.

But Lalezari, the lead study's lead researcher, said maraviroc could be combined with isentress for added benefit. Maraviroc might also be combined with the experimental anti-viral from Johnson & Johnson (down $0.26 to $64.49, Charts, Fortune 500), said Lalezari.

"We're at a unique moment in the history of the epidemic," said Lalezari. "Everyone in the country who has failed treatment in one way or another is being given a second chance to shut down the virus with these new combinations."

Pfizer is the world's leading drugmaker in terms of annual sales, but Johnson & Johnson is the No. 1 U.S. pharma company on the Fortune 500 because it's sales are boosted by its consumer division. Merck is the No. 3 U.S. drugmaker, followed by Abbott Laboratories (down $0.04 to $57.17, Charts, Fortune 500), Wyeth (down $0.20 to $55.53, Charts, Fortune 500) and Bristol-Myers Squibb (up $0.27 to $28.78, Charts, Fortune 500).

The analysts interviewed for this story do not own shares of Merck or Pfizer stock, but Deutsche Bank North America owns Merck stock and seeks business with both companies.