The drugmaker famous for Viagra has a new strategy for fighting cancer that could generate $5 billion a year. We got a look inside.

• Developing drugs to treat cancer is a major part of pharmaceutical giant Pfizer's future strategy.
• Pfizer already has a presence in breast cancer and prostate cancer, but is working to expand that. The company projects that oncology franchises could bring in at least $5 billion annually in the next several years.
• Andy Schmeltz, Pfizer's global head of cancer, told Business Insider about the "recipe" that will help set the company apart.

Sitting in his spacious, wood-accented midtown office, Pfizer cancer chief Andy Schmeltz gestures to a diagram that charts out drug giant Pfizer's agenda for the next several years.

It shows the pharmaceutical company's ambitious "15 in 5" plan, laying out the 15 franchises that could become billion-dollar sellers for the company - far more than the five and two produced in prior five-year spans.

It's also impossible not to notice how many of the drugs treat cancer. At a third of the list, Pfizer hopes oncology could bring in at least $5 billion each year by 2022, with at least a billion in sales expected in total from four new cancer drugs that were recently approved.

"We're glad you noticed," Schmeltz said, smiling.

A common stereotype in the healthcare industry goes something like this: Small, adaptable biotech companies come up with innovative new drugs, and then large, slow-moving pharmaceutical companies sweep in and buy them.

The perception has held particularly strong for Pfizer, which ranks as one of the biggest US drugmakers, with a nearly $250 billion market cap and up to $55.5 billion in expected 2018 revenue. Pfizer is perhaps best known for products like the erectile dysfunction medication Viagra and Lipitor, for high cholesterol.

The 170-year-old drug behemoth is on a mission to change that, though, with oncology set to play a key role. As part of its focus on producing more cutting-edge medicines, Pfizer recently announced a spin-off of its consumer health business with GlaxoSmithKline, including popular brands like Advil, ChapStick and Emergen-C.

The company "gets the rap, historically, of being large and slow and, to be honest with you, if you go back not too many years, had a reputation for questionable [research and development] productivity," Schmeltz told Business Insider last month. But "when we see the science moving in a particular direction, we can really move quickly."

A 'recipe' for cancer investments

Pfizer is currently focused on two types of cancer: breast cancer, including its flagship medication Ibrance, and prostate cancer, through its drug Xtandi.

Schmeltz, a 16-year Pfizer veteran who came up through the commercial side of the company and started as global president of Pfizer Oncology a year ago, points to Ibrance as one of his first examples of how quickly Pfizer can move.

The breast cancer drug, which is jointly commercialized with Japan's Astellas Pharma, had its first major data presentation just three years before its US approval in 2015, Pfizer says. Today, about 73% of women with breast cancer are eligible for Ibrance or a medication like it, the drugmaker says.

The drug giant has also got ambitions in renal cell carcinoma (Sutent, Inlyta and Inlyta plus Bavencio), lung cancer (Xalkori, Lorbrena and Vizimpro) and hematology, Schmeltz said, plus targeted immunotherapy approaches with avelumab.

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Morgan Stanley analyst David Risinger, who has called Ibrance Pfizer's top growth driver, said late last month that "its oncology pipeline includes a collective group of new cancer drugs that add up to blockbuster sales potential."

Not all Pfizer's investments have panned out. Two late-stage ovarian cancer studies failed in recent months. The cancer drug Bavencio has also had failures when tried in other types of cancers.

Pfizer is also active in longer-term research, the third prong of the company's strategy, which it hopes will produce the next big medical innovations.

Other companies working in oncology - and there are a growing number - have become leaders in immuno-oncology, using the body's immune system to fight cancer, or focus on blood cancers.

But part of what Schmeltz calls "the right recipe" means doing the opposite, or investing in a balanced way across different anti-cancer approaches.

Today, that means using roughly half of Pfizer's resources to invest in categories like small molecule, targeted and precision therapies, or drugs that target specific cancer-linked molecules, and roughly half in immuno-oncology approaches, according to Schmeltz, "rather than disproportionately going in one direction or the other."

"We're trying to be thoughtful that, given the unmet need in oncology, you can't have deep expertise and capability in everything across oncology," he told Business Insider.

Read: A Yale scientist who pioneered a cutting-edge approach to cancer treatment is warning that the field is going off-course - and that drug giants could be making it worse

Building from breast and prostate cancer

The pharmaceutical giant also plans to keep leading in breast and prostate cancer, Schmeltz said.

If ongoing studies testing Ibrance in early breast cancer and as an add-on therapy are successful, they "could really expand the utility of Ibrance to women with breast cancer before the cancer has metastasized, which really could make a profound difference for them," he said, referring to the process by which cancer spreads in the body.

Those results are expected around 2020 or later. Including a form of metastatic breast cancer that Ibrance is already approved for, success could mean roughly doubling the number of women eligible for the drug, according to Schmeltz.

The same strategy applies in prostate cancer as well. Pfizer acquired Xtandi as part of a $14 billion acquisition of Medivation back in 2016. It started off in the metastatic disease, and recently got a US approval in a non-metastatic form of the disease.

The drug is also being studied in metastatic hormone-sensitive prostate cancer and non-metastatic hormone-sensitive prostate cancer - all paving the way to a wider potential patient population, Schmeltz said.

Read more: Pfizer executives are changing their tune on an approach for a promising new way to treat cancer, and it could be where the field is headed

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