Kush DuaMBA

(Pharmaceutical Management)

Company Pfizer Inc

Category Pharmaceuticals

Sector Healthcare

Founded 1849

Founded By Charles Pfizer & Charles Earhart

Headquarters New York

Segment Cardiovascular, Infectious Diseases,

Central Nervous System Disorders,

Metabolic Disorders, Arthritis, Oncology,

Dysfunction, Allergy, Urology, Consumer

Health Care, Animal Health

Pfizer

Opportunity

Strength

Threat

Weakness

Market Leader

Sales of US$44.4billion

Strong credentials

Pfizer has launched some very successful products in past that lead to large

economic growth. E.g. Lipitor(US$12.7billion), Lyrica, Champix

Marketing Strength

Pfizer has commercially outperformed its competitors in past 15 years with

impressive and effective direct consumer marketing

Research & Development

R&D innovation with a broad therapeutic coverage. Largest spender in

R&D sector with an investment of US$9.4billion in 2011

Global Presence

Although major market segment is US, pfizer is also present across Europe,

Asia, Latin America, Canada and Africa.

Workforce

A total of 78,000 employees form a part of the huge workforce of pfizer

Patents

Existing Patent protection for a number of years on key products

Mergers & Acquisitions

Mergers and acquisitions with big pharma brands increasing brand

reputation.eg

Wyeth acquisition2009

The combined company was expected to save US$4 billion

Pfizer acquired Warner-Lambert in 2000 for $111.8 bn

Pfizer merged with Pharmacia in 2002. The merger was again driven in part by the

desire to acquire full rights to a product, Celebrex (Celecoxib)

Pfizer announced its acquisition of InnoPharma in 2014 for $360 million

Latest Achievement

On March 28, 2014, the U.S. FDA approved Pfizer's over-the-counter

Nexium (esomeprazole 20 mg) for the treatment of frequent heartburn

Heavy reliance on blockbuster drugs

Expiring patents

Negative Brand Image

Negative brand image due to involvement in largest healthcare fraud of

marketing its drug(BEXTRA) illegally which resulted in damaged reputation and enormous

payouts. App. US$4billion was paid by Pfizer to USFDA and US Govt

Loss of Revenue

Pfizer’s revenues dropped by 13% in 2008 due to loss of exclusive rights of

NORVASC and ZYRTEC/ZYRTEC-D and low sales of CHAMPIX

Discontinued Projects

Pfizer discontinued as many as 25 projects during the year 2008-2009

Low spending in R&D compared to competitors

Pfizer ranks 10th when it comes to spending on R&D

Reduction in R&D Budget

Pfizer reduced its R&D budget from US$9.4billion in 2011-12 to US$6.5-

7billion in 2013

Biologics Market

Pfizer has very limited penetration/involvement in biologics market

Funds

Operating income of US$ 15.716 billion means huge fund s available for

product/company

Focus on biologics

With huge funds and innovative R&D, Pfizer has an opportunity to develop

new drugs, get into market and drive revenue growth.

Mergers & Acquisitions

Large number of M&A by Pfizer provide to expand its therapeutic coverage

as well as market share and penetration into the global market.

E.g..- Wyeth acquisition in 2009- to save US$4billion annually

Chance for Blockbusters

Boehringer Ingelheim- Spiriva (tiotropium), a novel, once-daily inhaled

treatment for COPD

Pipeline

Phase2 e.g.- Xeljanz® (tofacitinib), PDE5 Inhibitor, Inlyta® etc.

Phase3 e.g.- Palbociclib, Ertugliflozin(merc), Xeljanz® (tofacitinib) etc.

New Centers

R&D centers in San Francisco, New York, Cambridge

Strengths

Competition

Eg- Viagra -high cost leading to cheaper substitutes

Regulatory Concerns

Exposure to generic drugs

Expiring patents

-3% sales growth

Pharmerging companies

Countries like India, China pose a competitive threat in regional markets

Mergers & Acquisitions

Increased M&A by Pfizer may lead to decrease in profitability

Negative Publicity

Economic Downturn

50000

50500

51000

51500

52000

52500

53000

53500

54000

54500

55000

2012 2013

54656

51854

Revenue($million)

~$3.1bil(6%)

8%revenue fall during 2012(Q4)

were negatively impacted by

erosion of branded Lipitor in the

U.S.

Decreased government purchases

of Enbrel in certain emerging

markets

0

2000

4000

6000

8000

10000

12000

14000

16000

Cost of sales SI&A expenses R&D expenses

9492

15029

6958

9273

14172

6554

2012 2013

US

$m

illi

on

Cost of sales, SI&A expenses and R&D expenses aggregately decreased

$1480mil.(5%) reflecting cost reduction and productivity initiatives

0

5000

10000

15000

20000

25000

2012 2013

14570

22003

Profit($million)

The effective tax rate declined 1.2 percentage to 27.5% from 28.7%. This decline

was primarily due to an increase in tax benefits compared to 2012.

Due to this decrease in tax rate and reduction in expenditure, net income or profit

increased 51%

0

5000

10000

15000

20000

25000

30000

Revenue Expenditure Profit

25383

1429016845

24126

14138

5241

2013 2014