| By Pfizer |
| Wednesday, 12 March 2008 |
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Pfizer Inc today reviewed strategies to accelerate and refocus Pfizer’s pipeline and capture new opportunities for global growth at a meeting for investment analysts. “We have made real changes in how we operate our business |
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– in our structure, culture and leadership – so that we have a much stronger foundation in place for pursuing the many opportunities before us”, said Chairman and CEO Jeff Kindler. “We are delivering and accelerating our pipeline, and we will seize promising growth opportunities spanning geographies, therapeutic areas and products.”
Kindler and his leadership team outlined their growth strategies including optimizing Pfizer’s patent-protected portfolio; generating revenue opportunities from established products; accelerating growth in emerging markets; focusing on continuous improvement and innovation; and investing in complementary businesses.
Accelerating Pipeline with Sharpened Focus on Key Disease Areas
“2008 marks the start of a multi-year period of increased productivity,” said Dr. Martin Mackay, president of Pfizer Global Research & Development. “We have made strategic decisions to focus internally and externally on high-value disease areas and to expedite compounds in our pipeline that will meet the future needs of patients and drive revenue growth.”
Seizing Opportunities for Global Growth
“We see a range of promising growth opportunities over the next three to five years where we will take advantage of our global scale,” said Ian Read, president of Worldwide Pharmaceutical Operations. “We will run our business with much more flexibility as we continue to empower Pfizer colleagues closest to our customers.”
To advance these growth opportunities, the Company highlighted innovative commercial models that take advantage of its broad portfolio of medicines and its significant global footprint spanning R&D, manufacturing, sales and marketing to change the way it meets the needs of customers around the world.
Optimizing the Patent-Protected Portfolio. The company will continue its focus on delivering revenue from patent-protected medicines, seven of which are global market leaders in |
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their disease areas. Revenues from certain in-line medicines including Geodon, Xalatan, Zyvox, and Vfend are growing at double-digit rates, and revenues from new medicines Chantix, Lyrica and Sutent more than doubled to $3.3 billion in 2007, versus $1.5 billion in 2006.
The Company is also establishing a new Business Unit focused solely on oncology in its Worldwide Pharmaceutical Group. This unit will bring together global oncology functions including clinical development, medical affairs, commercial development, sales and marketing. It will have the resources to seize growth opportunities to strengthen Pfizer’s research investment in oncology, a market expected to more than double in the next decade. The Oncology Business Unit will enable the Company to expedite launches of novel oncology agents, as well as to focus research efforts on cancers common in Asia, including those of the liver, esophagus and nasopharynx.
Seizing Growth Opportunities in Emerging Markets. Pfizer also announced plans to capture greater revenue in emerging markets in Latin America, Eastern Europe and Asia. The company will leverage its global scale and breadth of products to provide health solutions to the growing and untapped market of middle-income patients living in these markets.
The Company pointed out four drivers that will help it expand in the $47 billion emerging Asian pharmaceutical market. Pfizer expects to reinforce its market leadership, increasing market share to 6% by 2012, up from 4% today. These drivers include expanding its existing presence in high growth markets, building leadership in oncology, tailoring portfolio offerings to local market needs and taking greater advantage of global manufacturing and R&D in Asia.
For example, Pfizer plans to expand operations in China from the 110 cities it now serves to more than 650 cities. Growing established products (medicines that have lost or will soon lose patent protection), launching new products and reaching more patients will enable Pfizer to continue to capitalize on its strong base in China, a country expected to be one of the world’s top five healthcare markets as early as 2010.
Forming Dedicated Business Unit for Established Products. The Company recently formed an Established Products Business Unit within Worldwide Pharmaceutical Operations, with the goal of achieving double-digit growth in the global market for established medicines.
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The newly formed unit will execute growth strategies tailored to the unique needs of branded emerging markets (such as China, India, Brazil and Russia), branded traditional markets (such as Japan, Western Europe and South Korea), and intellectual-property-driven markets (such as the United States and Canada).
The Company expects to increase market share by leveraging its existing portfolio through product enhancements and reformulations, pursuing new indications for niche markets, and intensifying late-stage lifecycle plans for its established medicines.
“By pursuing growth strategies in the right geographies, with the right products and business models, we will drive change, seize opportunities and create value for customers,” said Read. “We are meaningfully diversifying our risk, which will be a significant advantage to us as we compete in this fast-changing marketplace.”
Reaffirming 2008 Guidance and Continuing to Create a Lower, More Flexible Cost Base.
Chief Financial Officer Frank D’Amelio reaffirmed Pfizer’s financial guidance for full-year 2008(1):
o Revenue range from $47 to $49 Billion
o Adjusted total costs(2)(3)decrease of at least $1.5-$2 billion on a constant currency basis(4)
o Adjusted cost of sales(2)as percentage of revenue range from 14.5% to 15.5%
o Adjusted SI&A expenses(2)range from $14.4 to $14.9 Billion
o Adjusted R&D expenses(2)range from $7.3 to $7.6 Billion
o Reported diluted EPS range from $1.78 to $1.93
o Adjusted diluted EPS(2)range from $2.35 to $2.45
o Effective tax rate(5)range from 22% to 22.5%
o Cash flow from operations range from $17 to $18 Billion
The Company is continuing to create a lower, more flexible cost base to align with revenues by expanding upon certain cost management initiatives, such as increasing outsourced manufacturing and further reducing the global real estate footprint.
“We are proactively managing our total cost structure to do what is necessary to size the company appropriately to align with our revenues so that we deliver growing profitability after the Lipitor loss of exclusivity,” said D’Amelio. “As a result, we expect to continue to generate industry-leading operating margins in a percentage range of the mid- to high- 30s”. |
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