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Pfizer share: How Pfizer’s nearly $ 7 billion takeover of the arena paid off

Pfizer‘s (PFE) nearly $ 7 billion takeover of Arena Pharmaceuticals looked forward-looking Tuesday after the company reported promising results for the treatment of ulcerative colitis. Pfizer shares rose moderately.


The last two phase studies of etrasimod are the first to be read out after Pfizer closed its Arena acquisition in March. After 12 weeks of treatment with etrasimod, 27% of patients with moderate to severe active ulcerative colitis went into remission. This compares with only 7.4% of patients receiving placebo. After one year, almost a third of the patients were in remission, 32.1%, compared with 6.7% of those in the placebo group.

In a separate 12-week study, 24.8% of patients went into remission compared to only 15.2% of placebo recipients.

SVB Securities analyst David Risinger listed etrasimod as a potential blockbuster substance in a recent report. But Michael Corbo, Pfizer’s development manager for immunology and inflammation, says the company had no insight into the test results when it bought Arena for $ 6.7 billion.

“When we made this deal with Arena, we did not see this data,” he told Investors Business Daily. “We actually made this deal based solely on Phase 2 data generated by Arena and a look at blinded data. That was it. We did a lot of modeling and had a lot of trust in our researchers, and we built a lot of trust with Arena researchers.”

Pfizer Stock: Digging into inflammatory diseases

Pfizer shares rose 1.1% near 53.50 in afternoon trading on the stock market today.

The news comes after Pfizer shares rose on good news for the Covid vaccine and the pending acquisition of Biohaven Pharmaceuticals (BHVN). Shares took back the 200-day moving average earlier this month and jumped the 50-day line on May 20, according to

Etrasimod belongs to a class of drugs that engage S1P receptors, which are linked to the immune system and inflammatory diseases. The approved, etrasimod could compete most directly with Bristol Myers Squibb‘s (BMY) Zeposia, another S1P receptor modulator.

However, there are differences in how the substances interact with the receptor. As a result, Bristol’s Zeposia may not interact well with antidepressants – especially those targeting serotonin and norepinephrine. The dose must also be increased slowly to prevent abnormal heart rate.

Pfizer’s Corbo does not expect etrasimod to meet the same challenges. In fact, he expects it to lead the S1P class in terms of safety and efficiency. Etrasimod can also compete with big names like AbbVieits (ABBV) Humira and even Pfizer’s own Xeljanz.

“We are in the middle of (efficiency) mixing with biological substances,” he said.

Etrasimod also meets secondary objectives

Another key point for Pfizer stock investors: Etrasimod met all secondary targets for Pfizer’s studies.

A statistically significant number of patients showed improvements during endoscopic review. Furthermore, patients showed symptom improvement and signs of mucosal healing, a phenomenon in which the intestinal mucosa heals.

After a year, a third of patients no longer needed corticosteroids to control the disease – a bullish note for the Pfizer stock. Corticosteroids have a number of side effects, including increased blood pressure, weight gain, fluid retention and psychological effects.

The most common side effects were headache, worsening of ulcerative colitis, Covid-19, dizziness, fever, joint stiffness, abdominal pain and nausea.

Sometime in the second half of 2022, Pfizer plans to ask the Food and Drug Administration to approve etrasimod in patients with ulcerative colitis. Pfizer also expects to have mid-stage data for etrasimod in eosinophilic oesophagitis and alopecia, and to launch a new study on eczema this year.

The Etrasimod results could strengthen the Pfizer stock, which already has a perfect Composite Rating of 99, according to IBD Digital. The shares are consolidating with a buy point of 61.81.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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